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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

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smaller reporting company)

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As of September 29, 2013, the aggregate market value of the registrant's voting common stock held by non-affiliates was approximately $3.111 billion (based upon the closing price of the common stock on the New York Stock Exchange on September 27, 2013).

As of May 12, 2014, there were 31,857,657 shares of the registrant's voting common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant's definitive Proxy Statement for the 2014 Annual Meeting of Stockholders are incorporated by reference into Part III.

Alliant Techsystems Inc. ("ATK" or the "Company") is an aerospace, defense, and commercial products company that operates in 22 states, Puerto Rico, and internationally. ATK was incorporated in Delaware in 1990.

ATK has made the following acquisitions over the past five years:

•

Blackhawk Industries Products Group Unlimited, LLC in April 2010

•

Caliber Company, parent company of Savage Sports Corporation ("Savage") in June 2013

•

Bushnell Group Holdings, Inc. ("Bushnell") in November 2013

ATK is a world leader in munitions. The Company is a leading producer of military small-caliber ammunition for use in soldier-carried weapons such as automatic and semi-automatic rifles, and machine guns. The Company is also one of the largest producers of medium-caliber ammunition used by crew-served weapons on armored vehicles and aircraft. ATK is one of the largest producers of military large-caliber ammunition used by tanks.

ATK is the leading manufacturer of law enforcement, military and sporting ammunition. The Company is also a top supplier of firearms and shooting accessories, and with the Bushnell acquisition, ATK has become a leader in the hunting, shooting sports, and outdoor recreation markets, with a broad portfolio of iconic brands in ammunition, accessories and optics, traditional centerfire and rimfire rifles, and shotguns. ATK’s leading brands include Federal Premium, Bushnell, BLACKHAWK!, and Savage Arms.

ATK is a leading manufacturer of solid rocket motors, supporting tactical, strategic, missile defense, and space launch applications. Its large solid rocket motors support NASA's current and planned human spaceflight programs, including the Space Launch Systems heavy-lift vehicle and the International Space Station Cargo Resupply Services. The Company produces other large solid rocket motors used to launch a wide variety of strategic missiles and launch vehicles for satellite insertions or deep-space scientific exploration, including the Trident II ("D5") and Minuteman III which provide strategic deterrence capability for the United States and its allies; Ground-based missile defense interceptors, Standard Missile interceptors, and missile defense targets; and Graphite Epoxy Motors and Orion® Motors for launch vehicles such as the Delta II, Delta IV, Minotaur, Taurus®, and Antares. The Company also produces smaller solid rocket motors for tactical missiles such as the Hellfire and Maverick. In addition, ATK is a market leader in orbit insertion solid rocket motors that place satellites in their proper orbit once they have arrived in space.

ATK is a provider of composite components for commercial and military aircraft, as well as affordable, precision-strike weapon systems. The Company manufactures medium-caliber chain guns for use on a variety of land, sea and airborne platforms. It is a provider of satellite and spacecraft components and subsystems. ATK provides propellant and energetic materials. It provides advanced missile warning sensors for a variety of aircraft; fuzes for a wide variety of weapon systems; and advanced barrier systems used by the U.S. Armed forces and its allies. Additional business lanes include special mission aircraft for intelligence, surveillance and reconnaissance and gunship missions; and advanced flares and decoys used for night operations and search and rescue missions.

We conduct our business through a number of separate legal entities that are listed in Exhibit 21 to this report. These legal entities function within our operating segments ("groups"). As of March 31, 2014, ATK's three operating segments were Aerospace Group, Defense Group, and Sporting Group.

On April 28, 2014, we entered into a Transaction Agreement (the “Transaction Agreement”) with Vista SpinCo Inc., a Delaware corporation and a wholly owned subsidiary of ATK (“Sporting”), Vista Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of ATK, and Orbital Sciences Corporation, a Delaware corporation (“Orbital”), providing for the spin-off of our Sporting Group business to our stockholders (the “Distribution”), which will be immediately followed by the merger of Vista Merger Sub Inc. with and into Orbital (the “Merger” and together with the Distribution, the “Transaction”), with Orbital surviving the Merger as a wholly owned subsidiary of ATK. This transaction is subject to stockholder approval prior to closing.

Sales; income before interest, loss on extinguishment of debt, income taxes and noncontrolling interest; total assets; and other financial data for each segment for the three years ended March 31, 2014 are set forth in Note 17 to the consolidated financial statements, included in Item 8 of this report.

References in this report to a particular fiscal year refer to the year ended March 31 of that calendar year.

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Aerospace Group

Aerospace Group, which generated 26% of ATK's external sales in fiscal 2014, develops and produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, missile defense interceptors, small and micro-satellites, satellite components, structures and subsystems, lightweight space deployables and solar arrays, and provides engineering and technical services. Additionally, the Aerospace Group operates in the military and commercial aircraft and launch structures markets. Other products include illuminating flares and aircraft countermeasures. The following is a description of the reporting units (“divisions”) within the group:

Aerospace Structures

The division is a provider of composite aircraft components for military and commercial aircraft manufacturers, primarily leveraging advanced automated composite fabrication techniques, including Fiber-Placement Machines and ATK-proprietary Automated Stiffener Forming Machines (ASFM). It provides a wide variety of composite parts for the F-35 II Lightning, a fifth-generation fighter aircraft for the U.S. military and its allies—these parts include upper and lower wing skins, nacelles, and access covers. It provides composite radomes and apertures for a number of military aircraft, including the RQ-4 Global Hawk and also provides wing stiffeners for the A400M. The division has a commercial aerospace composites center of excellence facility in Clearfield, Utah, to support its commercial aerospace customers, including Airbus, General Electric, Rolls Royce, and Boeing. The division is under contract to produce the majority of the composite stringers and frames for the Airbus A350XWB wide body passenger jetliner, using the ASFM process. Additional major commercial programs include production of the fan containment case for General Electric's GEnx engine which will be used to power the Boeing 747-8 Cargo aircraft, and a partnership with Rolls Royce to produce the aft fan case for the Trent XWB engine, which will be used to power the Airbus A350 aircraft. Recently the division was awarded a contract to produce composite components for the Boeing 787-9 and 787-10 commercial aircraft.

Space Systems Operations

The division is the production home for the Company's solid rocket motors for NASA's current and planned human spaceflight programs, including the Space Launch System ("SLS") heavy lift vehicle and the International Space Station Cargo Resupply Services. In addition, the division produces a launch abort system ("LAS") motor for the Orion crew capsule that was designed to safely pull the crew away from the launch vehicle in the event of an emergency during the launch. The Space Shuttle program was completed in early 2012.

The division also produces large solid rocket motors for the Trident II ("D5") Fleet Ballistic Missile and the Minuteman III Intercontinental Ballistic Missile. These two programs provide the backbone of the United States' strategic deterrence. Additional solid rocket motors being produced by the division include GEM 40 and GEM 60 motors for the Delta II, Delta IV, Orion® motors for the Orbital Science Corporation's Pegasus®, Taurus®, and Minotaur launch vehicles, and CASTOR® motors for Orbital Science Corporation's recently launched Antares rocket and Taurus rocket, and Missile Defense Agency targets. The division supplies Orion® motors for all three stages of the ground-based missile defense system. In addition, the division produces advanced flares and decoys that provide illumination for search and rescue missions, and countermeasures against missile attacks. The division also produces thermal management systems that provide heating and cooling for spacecraft, either on-orbit or traveling through the solar system.

Space Components

The division is a U.S. supplier of satellite mechanical components and assemblies for a wide variety of commercial, civil, and defense spacecraft programs. It has strong market positions in satellite fuel and oxidizer tanks, precision structures, solar power arrays, deployable structures, and various spacecraft composite primary and secondary structures. The division produces the very stable backplane structure for the James Webb Space Telescope ("JWST") mirrors, critically enabling that mission. Under contract to Lockheed Martin, the division has now transitioned from low-rate to full-rate production on the Terminal High Altitude Area Defense ("THAAD") for the mid-body aerostructures. The business also supports multiple Lockheed-Martin A2100 spacecraft programs and Orbital Science's STAR2 commercial geosynchronous programs. Additionally, the unit supports NASA's manned space initiatives via the solar arrays on the Orion/Multi-Purpose Crew Vehicle ("MPCV") and the propulsion tanks on Orbital Science's Crew Resupply Service ("CRS") Cygnus vehicle.

Defense Group

Defense Group, which generated 35% of ATK's external sales in fiscal 2014, develops and produces military small-, medium-, and large-caliber ammunition, precision munitions, gun systems, and propellant and energetic materials. It also operates the U.S. Army ammunition plant in Independence, MO and a Naval Sea Systems Command (“NAVSEA”) facility in Rocket Center, WV. Defense Group is a leader in tactical solid rocket motor development and production for a variety of air-, sea- and land-based systems. The group serves a variety of domestic and international customers in the defense, aerospace and

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security markets in either a prime contractor, partner or supplier role. Defense Group is also home to ATK's missile defense interceptor capabilities, airborne missile warning systems, advanced fuzes, and defense electronics. The group produces the U.S. Navy's Advanced Anti-Radiation Guided Missile (“AARGM”) and the Multi-Stage Super Sonic Target (“MSST”), as well as developing advanced air-breathing propulsion systems and special mission aircraft for specialized applications. The following is a description of the reporting units (“divisions”) within the group:

Armament Systems

The division is home to ATK's precision fire weapons and medium- and large-caliber ammunition programs. It is under contract to produce the Precision Guidance Kit for 155mm artillery and is the developer and producer of the Mortar Guidance Kit for the U.S. Army's Advanced Precision Mortar Initiative (“APMI”). The division is a large producer of medium- and large-caliber ammunition for the United States and allied nations. An additional program of note is the Individual Semi-Automatic Airburst System (“ISAAS”) under development for the U.S. Army. The division also produces medium-caliber chain guns and is a systems integrator and designer of medium-caliber ammunition for integrated gun systems globally. These gun systems are used on a variety of ground combat vehicles, helicopters and naval vessels, including the Bradley Fighting Vehicle, Light Armored Vehicle, coastal patrol craft, and Apache helicopter. To date, the division has supplied approximately 16,000 medium-caliber gun systems to the U.S. military and allied forces worldwide. New products include a link-fed variant of the Apache gun system.

Defense Electronic Systems

The division provides customers advanced radiation homing missile systems, special-mission aircraft, missile warning systems, and mission support equipment. Key programs include the AARGM missile, the AAR-47 missile warning system used by U.S. and allied fixed and rotor-wing aircraft to defeat incoming missile threats and the MSST for the U.S. Navy. The division also provides special-mission aircraft that integrate sensors, fire control equipment, gun systems and air-to-ground weapons capability for use in counterinsurgency, border/coastal surveillance, and security missions.

Missile Products

The division provides customers with tactical, high-performance, solid rocket motor propulsion for a variety of surface and air launched missile systems including Hellfire, Maverick, Advanced Medium-Range Air-to-Air Missile and Sidewinder. The division is also home to fuzing and sensors for various artillery, mortar, grenade and air-dropped weapons including the Hard Target Void Sensing Fuze. They also produce metal components for various medium-caliber ammunition and 120mm tank ammunition and produce specialty composite and ceramic structures used on military platforms and in energy applications. The division provides customers with the third-stage propulsion and the Solid Divert and Attitude Control System used to guide the kinetic warhead on the Standard Missile missile defense interceptor. Additional capabilities include the STAR™ family of satellite orbit insertion motors, high performance rocket boosters, and advanced air-breathing propulsion for platforms designed for Mach 3+ flight. ATK continues to operate its New River Energetics facility located on the Radford Army Ammunition Plant (“RFAAP”) in Radford, VA, which provides energetics to support ATK's Sporting Group, international program efforts and other business.

Small-Caliber Systems

Since 2000, ATK has operated the Lake City Army Ammunition plant ("LCAAP") in Independence, MO. In fiscal 2014, the Company produced approximately 2.0 billion rounds of small-caliber ammunition in the facility. ATK is currently under contract with the U.S. Army to operate the LCAAP through September 2020. The division also provides non-NATO munitions and weapons systems to the U.S. Army for use by security forces in Afghanistan and ammunition that is provided to the hunting/sport shooting enthusiast markets through our Sporting Group.

Sporting Group

Sporting Group, which generated 39% of ATK's external sales in fiscal 2014, develops and produces ammunition, accessories, rifles and shotguns for the hunting, shooting, law enforcement, outdoor and sporting markets. The following is a description of the reporting units ("product lines") within the group as of March 31, 2014.

tactical systems and equipment to the U.S. Government, allies and law enforcement, both domestic and international. These products are marketed under well-known brand names, including BLACKHAWK!®, Eagle® and Uncle Mike’s®.

Ammunition

The ammunition product line includes the development and production of ammunition for the hunting/sport shooting enthusiast markets. It also produces ammunition for the local law enforcement, U.S. Government, and international markets. The product line's Federal Premium® and Speer® brands of ammunition are among market-leaders. Additional brands include American Eagle®, Blazer®, CCI®, Estate Cartridge®, Fusion®, and Independence®.

Firearms

The firearms product lines includes development and production of firearms for the hunting/sport shooting enthusiast markets, including centerfire rifles, rimfire rifles, shotguns and range systems. The Savage brand is among the leaders in the firearms market. Other brands include Savage Range Systems and Stevens.

Customers

Our sales have come primarily from contracts with agencies of the U.S. Government and its prime contractors and subcontractors. As the various U.S. Government customers, including the U.S. Army, U.S. Navy, NASA, and the U.S. Air Force, make independent purchasing decisions, we do not generally regard the U.S. Government as one customer. Instead, we view each agency as a separate customer.

Sales by customer were as follows:

Percent of Sales

For Fiscal Years Ended:

2014

2013

2012

Sales to:

U.S. Army

20

%

29

%

28

%

U.S. Navy

10

%

13

%

12

%

NASA

9

%

10

%

10

%

U.S. Air Force

4

%

6

%

6

%

Other U.S. Government customers

10

%

9

%

9

%

Total U.S. Government customers

53

%

67

%

65

%

Commercial and foreign customers

47

%

33

%

35

%

Total

100

%

100

%

100

%

Sales to the U.S. Government and its prime contractors during the last three fiscal years were as follows:

Fiscal

U.S. Government

sales

Percent of

sales

2014

$

2,525

million

53

%

2013

2,932

million

67

%

2012

2,922

million

65

%

Our reliance on U.S. Government contracts entails inherent benefits and risks, including those particular to the aerospace and defense industry. No single contract contributed more than 10% of our sales in fiscal 2014. Our top five contracts accounted for approximately 21% of fiscal 2014 sales.

The breakdown of our fiscal 2014 sales to the U.S. Government as a prime contractor and a subcontractor was as follows:

Sales as a prime contractor

62

%

Sales as a subcontractor

38

%

Total

100

%

No single customer, other than the U.S. Government customers listed above, accounted for more than 10% of our fiscal 2014 sales.

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Foreign sales for each of the last three fiscal years are summarized below:

Fiscal

Foreign sales

Percent of

sales

2014

$

591

million

12.4

%

2013

438

million

10.0

%

2012

703

million

15.2

%

Sales to foreign governments and other foreign customers may require approval by the U.S. Department of Defense ("DoD") and the U.S. State Department or the U.S. Commerce Department. Our products are sold directly to U.S. allies as well as through the U.S. Government. Approximately 30% of these sales were in Aerospace Group, 29% were in Defense Group, and 41% were in Sporting Group. Sales to no individual country outside the United States accounted for more than 4% of ATK's sales in fiscal 2014.

Our major law enforcement customers include large metropolitan police departments, the Department of Homeland Security, the Federal Bureau of Investigation, and the U.S. Secret Service. Major customers of our sporting business include retailers such as Walmart, Cabela's, and Gander Mountain, as well as large wholesale distributors. Major commercial aerospace customers include Airbus S.A.S., Boeing, Rolls-Royce Group plc, and General Electric Company.

Backlog

Contracted backlog is the estimated value of contracts for which orders have been recorded, but for which revenue has not yet been recognized. The total amount of contracted backlog was approximately $7.3 billion and $7.8 billion as of March 31, 2014 and 2013, respectively. Included in contracted backlog as of March 31, 2014 was $1.4 billion of contracts not yet funded.

As of March 31, 2014, approximately 51% of contracted backlog has a delivery date or is expected to be filled after March 31, 2015.

Total backlog, which includes contracted backlog plus the value of unexercised options, was approximately $7.6 billion as of March 31, 2014 and $8.2 billion as of March 31, 2013.

Seasonality

Sales of sporting ammunition have historically been lower in our first fiscal quarter. However, with the influx of new customers into the shooting sports, this seasonality has been reduced in fiscal 2014. Our other businesses are not generally seasonal in nature.

Competition

Our aerospace and defense businesses compete against other U.S. and foreign prime contractors and subcontractors, many of which have substantially more resources to deploy than we do in the pursuit of government and industry contracts. Our ability to compete successfully in this environment depends on a number of factors, including the effectiveness and innovativeness of research and development programs, our ability to offer better program performance than our competitors at a lower cost, our readiness with respect to facilities, equipment, and personnel to undertake the programs for which we compete, and our past performance and demonstrated capabilities.

Our Sporting Group business competes against manufacturers with well-established brand names and strong market positions. A key strategy in these highly competitive markets is the consistent flow of new and innovative products. We also attempt to control operating costs, particularly for raw materials, since retail consumer purchasing decisions are often driven by price. Enhanced product performance is especially important to our law enforcement customers as they rely on our products to protect and serve the public.

Additional information on the risks related to competition can be found under "Risk Factors" in Item 1A. of this report.

ATK generally faces competition from a number of competitors in each business area, although no single competitor competes along all of ATK's segments. ATK's principal competitors in each of its segments are as follows:

We conduct extensive research and development ("R&D") activities. Company-funded R&D is primarily for the development of next-generation technology. Customer-funded R&D is comprised primarily of activities we conduct under contracts with the U.S. Government and its prime contractors. R&D expenditures in each of the last three fiscal years were as follows:

Fiscal

Company-funded

Research and

Development

Customer-funded

Research and

Development

2014

$

62.5

million

$

495.1

million

2013

64.7

million

538.7

million

2012

66.4

million

598.1

million

Raw Materials

We use a broad range of raw materials in manufacturing our products, including aluminum, steel, copper, lead, graphite fiber, epoxy resins, zinc, and adhesives. We monitor the sources from which we purchase these materials in an attempt to ensure there are adequate supplies to support our operations. We also monitor the price of materials, particularly commodity metals like copper, which have fluctuated dramatically over the past several years.

We procure these materials from a variety of sources. In the case of our government contracts, we are often required to purchase from sources approved by the U.S. DoD. When these suppliers or others choose to eliminate certain materials we require from their product offering, we attempt to qualify other suppliers or replacement materials to ensure there are no disruptions to our operations. Additional information on the risks related to raw materials can be found under "Risk Factors" in Item 1A. of this report.

Intellectual Property

As of March 31, 2014, we owned 730 U.S. patents and 294 foreign patents. We also had approximately 188 U.S. patent applications and approximately 191 foreign patent applications pending.

Although we manufacture various products covered by patents, we do not believe that any single existing patent, license, or group of patents is material to our success. We believe that unpatented research, development, and engineering skills also make an important contribution to our business. The U.S. Government typically receives royalty-free licenses to inventions made under U.S. Government contracts. Consistent with our policy to protect proprietary information from unauthorized disclosure, we ordinarily require employees to sign confidentiality agreements as a condition of employment.

As many of our products are complex and involve patented and other proprietary technologies, we face a risk of claims that we have infringed upon third-party intellectual property rights. Such claims could result in costly and time-consuming litigation, the invalidation of intellectual property rights, or increased licensing costs.

Regulatory Matters

U.S. Governmental Contracts

We are subject to the procurement policies and procedures set forth in the Federal Acquisition Regulation ("FAR"). The FAR governs all aspects of government contracting, including competition and acquisition planning; contracting methods and contract types; contractor qualifications; and acquisition procedures. Every government contract contains a list of FAR provisions that must be complied with in order for the contract to be awarded. The FAR provides for regular audits and reviews of contract procurement, performance, and administration. Failure to comply with the provisions of the FAR could result in contract termination.

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The U.S. Government may terminate its contracts with its suppliers, either for convenience or in the event of a default as a result of our failure to perform under the applicable contract. If a cost-plus contract is terminated for convenience, we are entitled to reimbursement of our approved costs and payment of a total fee proportionate to the percentage of the work completed under the contract. If a fixed-price contract is terminated for convenience, we are entitled to payment for items delivered to and accepted by the U.S. Government and fair compensation for work performed plus the costs of settling and paying claims by terminated subcontractors, other settlement expenses, and a reasonable profit on the costs incurred or committed. If a contract termination is for default, we are paid an amount agreed upon for completed and partially completed products and services accepted by the U.S. Government and may be liable to the U.S. Government for repayment of any advance payments and progress payments related to the terminated portions of the contract, as well as excess costs incurred by the U.S. Government in procuring undelivered items from another source. Additional information on the risks related to government contracts can be found under "Risk Factors" in Item 1A. of this report.

We also must comply with U.S. and foreign laws governing the export of munitions and other controlled products and commodities. These include regulations relating to import-export control, exchange controls, the Foreign Corrupt Practices Act, and the anti-boycott provisions of the U.S. Export Administration Act.

Environmental

Our operations are subject to a number of federal, state and local environmental laws and regulations, as well as applicable foreign laws and regulations that govern the discharge, treatment, storage, remediation and disposal of certain materials and wastes, and restoration of damages to the environment. Compliance with these laws and regulations is a responsibility we take seriously. We believe that forward-looking, proper, and cost-effective management of air, land, and water resources is vital to the long-term success of our business. Our environmental policy identifies key objectives for implementing this commitment throughout our operations. Additional information on the risks related to environmental matters can be found under "Risk Factors" in Item 1A. of this report.

Employees

As of March 31, 2014, ATK had approximately 16,000 employees. ATK has union-represented employees at six locations, comprising less than 20% of its total workforce. One location has two separate bargaining units, each with its own collective bargaining agreement (“CBA”). One location is currently negotiating its initial CBA with the Company. The Company’s current CBAs expire in fiscal 2015, 2016, and 2018.

Executive Officers

The following table sets forth certain information with respect to ATK's executive officers as of May 1, 2014:

Name

Age

Title

Mark W. DeYoung

55

President and Chief Executive Officer

Scott D. Chaplin

47

Senior Vice President, General Counsel and Secretary

Neal S. Cohen

54

Executive Vice President and Chief Financial Officer

Michael A. Kahn

55

Senior Vice President and President Defense Group

Blake E. Larson

54

Senior Vice President and President Aerospace Group

Stephen M. Nolan

45

Senior Vice President of Strategy and Business Development

Jay Tibbets

53

Senior Vice President and President Sporting Group

Christine A. Wolf

54

Senior Vice President Human Resources

Each of the above individuals serves at the pleasure of the Board of Directors and is subject to reelection annually on the date of the Annual Meeting of Stockholders. No family relationship exists among any of the executive officers or among any of them and any director of ATK. There are no outstanding loans from ATK to any of these individuals. Information regarding the employment history (in each case with ATK unless otherwise indicated) of each of the executive officers is set forth below.

Mark W. DeYoung has served in his present position since February 2010. From 2002 to February 2010, he was President ATK's Armament Systems Group, holding the title of Senior Vice President and President Armament Systems (formerly Ammunition Systems) from 2006 to February 2010, Senior Vice President, Ammunition Systems, from 2004 to 2006, and Group Vice President, Ammunition Systems, from 2002 to 2004. He has more than 25 years of experience in leading organizations in the defense, aerospace, and commercial sectors.

Scott D. Chaplin has held his position since joining ATK in October 2012. Prior to joining ATK, he was Senior Vice President, General Counsel and Secretary of Stanley, Inc. from 2005 to 2010. Before that, he was General Counsel of BAE

7

Systems Information Technology and prior to that served as General Counsel of DigitalNet, Inc. Mr. Chaplin also practiced law at Morgan, Lewis & Bockius, LLP and Reed Smith, LLP, both in Washington, D.C.

Neal S. Cohen has held his position since joining ATK in February 2012. Prior to joining ATK, he was President and Chief Operating Officer of Laureate Education Inc., a global provider of private, post-secondary education, from 2008 to 2011. Before that, he was an executive officer of Northwest Airlines, Inc., serving as Executive Vice President, Strategy and International and also as Chief Executive Officer Regional Operations from 2007 to 2008, and as Executive Vice President and Chief Financial Officer from 2005 to 2007. From 2002 to 2004, Mr. Cohen was Executive Vice President and Chief Financial Officer of U.S. Airways.

Michael A. Kahn has held his present position since April 1, 2012. From August 2010 through March 2012, he served as the Senior Vice President of Missile Products Group. From 2009 to August 2010, he was Executive Vice President Aerospace Systems. From 2008 to 2009, he was Vice President and General Manager Launch Systems and, from 2001 to 2008, he was Vice President Space Launch Systems. Prior to that, he held a number of leadership positions across a variety of programs and operations of the Company.

Blake E. Larson has held his present position since April 2010. From 2009 to March 2010, he was Senior Vice President and President Space Systems. From 2008 to 2009, he was Executive Vice President Space Systems and General Manager Spacecraft Systems from August 2008 to January 2009. From 2006 to 2008, he was Executive Vice President of Mission Systems Group. Prior to that, Mr. Larson held a variety of key leadership positions in operations of several businesses within the Company's aerospace and defense portfolio.

Stephen M. Nolan has held his present position since July 2013. From February 2013 through July 2013, he served as Interim Senior Vice President of Business Development. From 2010 to 2013, he was Vice President, Strategy and Business Development, Aerospace Systems, and from 2009 to 2010, he was Vice President and General Manager, Advanced Systems. Prior to that, he held a number of leadership positions across the Company. Before joining the Company in 2006, he was a Director of Corporate Strategy and Development at Raytheon Company and an Engagement Manager at McKinsey & Company.

Jay Tibbets has held his present position since July 2013 and served as Senior Vice President and Interim President of the Sporting Group since February 2013. From February 2010 to 2013, he served as Senior Vice President Business Development. From March 2002 to 2010, he served as Vice President Strategy and Business Development Armament Systems Group. Prior to that, he served as Director Business Development with leadership responsibilities for overall business strategies and in support of the wide variety of programs, pursuits and advanced technologies.

Christine A. Wolf has held her present position since joining ATK in March 2011. She has more than 30 years of experience in the Human Resources field. Prior to joining ATK, she was the Senior Vice President and Chief Human Resources Officer for Fannie Mae from 2008 to March 2011. Prior to that, she was the Chief Human Resources Officer for E*Trade from 2004 to 2008.

Available Information

You can find reports on our company filed with the Securities and Exchange Commission ("SEC") on our Internet site at www.atk.com under the "Investor Relations" heading free of charge. These include our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. We make these reports available as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

You can also obtain these reports from the SEC's Public Reference Room, which is located at 100 F Street NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room is available by phone (1-800-SEC-0330) or on the Internet (www.sec.gov). This site contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The content on any website referred to in this Form 10-K is not incorporated by reference into this Form 10-K unless expressly noted.

ITEM 1A. RISK FACTORS

ATK is subject to a number of risks, including those related to being a U.S. Government contractor and those related to domestic and international commercial sales. The material risks facing ATK are discussed below.

ATK's business could be adversely impacted by reductions or changes in NASA or U.S. Government military spending.

8

As a substantial portion of ATK's sales are to the U.S. Government and its prime contractors, ATK depends heavily on the contracts underlying these programs. Significant portions of ATK's sales come from a small number of contracts. ATK's top five contracts, all of which are contracts with the U.S. Government, accounted for approximately 21% of fiscal 2014 sales. The loss or significant reduction of a material program in which ATK participates could have a material adverse effect on ATK's operating results, financial condition, or cash flows.

ATK's small-caliber ammunition operations for the U.S. military and U.S. allies are conducted at the Lake City Army Ammunition Plant ("LCAAP" or "Lake City") in Independence, Missouri. Lake City is the Army's principal small-caliber ammunition production facility and is the primary supplier of the U.S. military's small-caliber ammunition needs. ATK took over operation of this facility on April 1, 2000 and is responsible for the operation and management, including leasing excess space to third parties in the private sector. On September 28, 2012, ATK was notified by the U.S. Army that it was selected for both the production of ammunition and continued operation and maintenance of the Lake City Army Ammunition Plant (“LCAAP”). The production contract runs through September 2019 and the facility contract runs through September 2020, with an option to extend the contract to 2023. Due to the competition for the contract, ATK has experienced a lower profit rate in the Small Caliber Systems division as we implemented the new contract. Future levels of government spending cannot be predicted with certainty and thus ATK production under this contract cannot be predicted with certainty.

The government budget structure remains constrained by the 2011 Budget Control Act which initially reduced the DoD topline budget by approximately $490 billion over 10 years starting in fiscal year 2012. In January 2013, the American Taxpayer Relief Act of 2012 was enacted, triggering further defense budget cuts of approximately $50 billion per year (or sequestration) beginning in March 2013. Until recently, Congress and the Administration had been unable to reach a broader fiscal agreement that would amend the Budget Control Act and avoid the impacts of sequestration. For GFY13, the first round of sequestration was triggered, reducing DoD accounts by $37 billion. The NASA budget was under similar sequestration pressure but had greater flexibility to manage the reductions across the portfolio and decided to preserve funding for key priorities such as the Space Launch System ("SLS").

In GFY14, the Administration faced the threat of an additional year of sequestration and deeper cuts requiring an additional reduction of $20 billion from the defense topline budget. The Budget Control Act Amendment adopted in December 2013 provided some relief to the deeper cuts required under sequestration in GFY14 and GFY15. For defense spending, the agreement effectively holds flat the topline budget at $499 billion for both GFY14 and GY15, providing over $30 billion in sequestration relief. For NASA, similar relief provided for non-defense discretionary spending should allow the NASA budget to remain flat over the same period at approximately $17.5 billion annually.

On January 17, 2014, Congress approved, and the President signed, the Omnibus Appropriations Act replacing the Continuing Resolution for the remainder of GFY14 and removing the threat of future government shutdowns. Consistent with the budget deal, the Omnibus Appropriations Act funds the DoD at $499 billion and replaces the across-the-board sequestration cuts with specific reductions across most accounts. Total funding, and funding for most programs, remains flat at GFY13 levels. Overseas Contingency Operations funding was increased by $5 billion above the requested amount, providing some additional relief to the defense budget. In the event NASA were to cancel the Space Launch System ("SLS") program, the Company believes that it will be reimbursed for certain amounts previously incurred by ATK, as well as amounts to be incurred by ATK, as part of that termination (e.g., severance, environmental liabilities, termination administration). There can be no assurance that ATK would be successful in collecting reimbursement of any termination liability costs. As of March 31, 2014 ATK had $59 million of net property, plant, and equipment and other assets related to the SLS and other contracts, and $518 million of goodwill recorded related to the Space Systems Operations reporting unit. These assets would be subject to impairment testing if significant changes are made to the SLS program and related contracts in future periods.

With the budget agreement now in place, sequestration (the after-the-fact across-the-board cuts) will be replaced in GFY15 with budget submissions expected to be in-line with these lower funding levels and programs adjusted to fit the lower expected funding levels. Budget pressures, such as rising personnel costs despite significant force reductions in the Army and Marine Corps, will present challenges to modernization and research and development accounts. ATK is preparing for a period where force reductions and a winding-down of overseas contingency operations, coupled with reduced training cycles and fairly healthy inventory levels for many ammunition and missile items, will result in less demand in some categories of products.

U.S. Government contracts are also dependent on the continuing availability of Congressional appropriations. Congress usually appropriates funds for a given program on a fiscal year basis even though contract performance may take more than one year. As a result, at the outset of a major program, the contract is usually incrementally funded, and additional monies are normally committed to the contract by the procuring agency only as Congress makes appropriations for future fiscal years. In addition, most U.S. Government contracts are subject to modification if funding is changed. Any failure by Congress to appropriate additional funds to any program in which ATK participates, or any contract modification as a result of funding

9

changes, could materially delay or terminate the program. This could have a material adverse effect on ATK's operating results, financial condition, or cash flows.

ATK is subject to intense competition for U.S. Government contracts and programs and therefore may not be able to compete successfully.

ATK encounters competition for most contracts and programs. Some of the competitors have substantially greater financial, technical, marketing, manufacturing, distribution, and other resources. ATK's ability to compete for these contracts depends to a large extent upon:

•

its effectiveness and innovativeness of research and development programs,

•

its ability to offer better program performance at a lower cost than the competitors,

•

its readiness with respect to facilities, equipment, and personnel to undertake the programs for which it competes, and

•

its past performance and demonstrated capabilities.

In some instances, the U.S. Government directs a program to a single supplier. In these cases, there may be other suppliers who have the capability to compete for the programs involved, but they can only enter or reenter the market if the U.S. Government chooses to open the particular program to competition and, as such, these types of programs are subject to risk of the U.S. Government providing new awards to other suppliers. ATK's sole-source contracts accounted for 64% of its U.S. Government sales in fiscal 2014.

The downsizing of the munitions industrial base has resulted in a reduction in the number of competitors through consolidations and departures from the industry. This has reduced the number of competitors for some contracts and programs, but has strengthened the capabilities of some of the remaining competitors. In addition, it is possible that there will be increasing competition from the remaining competitors in business areas where they do not currently compete, particularly in those business areas dealing with electronics, as a result of budget pressures caused by Congressional appropriations and sequestration.

ATK may not be able to react to increases in its costs due to the nature of its U.S. Government contracts.

ATK's U.S. Government contracts can be categorized as either "cost-plus" or "fixed-price."

Cost-Plus Contracts. Cost-plus contracts are cost-plus-fixed-fee, cost-plus-incentive-fee, or cost-plus-award-fee contracts. Cost-plus-fixed-fee contracts allow ATK to recover its approved costs plus a fixed fee. Cost-plus-incentive-fee contracts and cost-plus-award-fee contracts allow ATK to recover its approved costs plus a fee that can fluctuate based on actual results as compared to contractual targets for factors such as cost, quality, schedule, and performance. The award or incentive fees that are typically associated with these programs are subject to uncertainty and may be earned over extended periods. In these cases, the associated financial risks are primarily in lower profit rates or program cancellation if cost, schedule, or technical performance issues arise.

Fixed-Price Contracts. Fixed-price contracts are firm-fixed-price, fixed-price-incentive, or fixed-price-level-of-effort contracts. Under firm-fixed-price contracts, ATK agrees to perform certain work for a fixed price and absorb any cost underruns or overruns. Fixed-price-incentive contracts are fixed-price contracts under which the final contract price may be adjusted based on total final costs compared to total target cost, and may be affected by schedule and performance. Fixed-price-level-of-effort contracts allow for a fixed price per labor hour, subject to a contract cap. All fixed-price contracts present the inherent risk of unreimbursed cost overruns. If the initial estimates used to calculate the contract price and the cost to perform the work prove to be incorrect, there could be a material adverse effect on operating results, financial condition, or cash flows. In addition, some contracts have specific provisions relating to cost, schedule, and performance. If ATK fails to meet the terms specified in those contracts, the cost to perform the work could increase or ATK's price could be reduced, which would adversely affect the Company's financial condition. The U.S. Government also regulates the accounting methods under which costs are allocated to U.S. Government contracts.

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The following table summarizes how much each of these types of contracts contributed to ATK's U.S. Government business in fiscal 2014:

Cost-plus contracts:

Cost-plus-fixed-fee

8

%

Cost-plus-incentive-fee/cost-plus-award-fee

10

%

Fixed-price contracts:

Firm-fixed-price

82

%

Total

100

%

ATK uses estimates in accounting for its programs. Changes in estimates could affect ATK's financial results.

Contract accounting requires judgment relative to assessing risks, estimating contract revenues, including the impact of scope change negotiations, estimating program costs, and making assumptions for schedule and technical issues. Due to the size and nature of many of ATK's contracts, the estimation of total revenues and cost at completion is complex and subject to many variables. Assumptions are made regarding the length of time to complete the contract because costs also include expected increases in wages and prices for materials. Similarly, many assumptions are made regarding the future impacts of such things as the business base, efficiency initiatives, cost reduction efforts, and contract changes and claim recovery. Incentives or penalties related to performance on contracts are considered in estimating revenue and profit rates, and are recorded when there is sufficient information to assess anticipated performance. Estimates of award and incentive fees are also used in estimating revenue and profit rates based on actual and anticipated awards.

Because of the significance of the judgments and estimation processes described above, it is possible that materially different amounts could be recorded if ATK used different assumptions or if the underlying circumstances were to change. Changes in underlying assumptions, circumstances or estimates may adversely affect future period financial performance. Additional information on ATK's accounting policies for revenue recognition can be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the section titled "Critical Accounting Policies" in Item 7 of this report.

ATK's U.S. Government contracts are subject to termination.

ATK is subject to the risk that the U.S. Government may terminate its contracts with its suppliers, either for convenience or in the event of a default by the contractor. If a cost-plus contract is terminated, the contractor is entitled to reimbursement of its approved costs. If the contractor would have incurred a loss had the entire contract been performed, then no profit is allowed by the U.S. Government. If the termination is for convenience, the contractor is also entitled to receive payment of a total fee proportionate to the percentage of the work completed under the contract. If a fixed-price contract is terminated, the contractor is entitled to receive payment for items delivered to and accepted by the U.S. Government. If the termination is for convenience, the contractor is also entitled to receive fair compensation for work performed plus the costs of settling and paying claims by terminated subcontractors, other settlement expenses, and a reasonable profit on the costs incurred or committed. While the contractor is entitled to these claims under either type of contract, there can be no assurance that these amounts will be recovered. If a contract termination is for default:

•

the contractor is paid an amount agreed upon for completed and partially completed products and services accepted by the U.S. Government,

•

the U.S. Government is not liable for the contractor's costs for unaccepted items, and is entitled to repayment of any advance payments and progress payments related to the terminated portions of the contract, and

•

the contractor may be liable for excess costs incurred by the U.S. Government in procuring undelivered items from another source.

Other risks associated with U.S. Government contracts may expose ATK to adverse consequences.

Like all U.S. Government contractors, ATK is subject to possible losses on contracts due to risks associated with uncertain cost factors related to:

•

scarce technological skills and components,

•

the frequent need to bid on programs in advance of design completion, which may result in unforeseen technological difficulties and/or cost overruns,

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•

the substantial time and effort required for design and development,

•

design complexity,

•

rapid obsolescence, and

•

the potential need for design improvement.

ATK is subject to procurement and other related laws and regulations, which non-compliance with may expose ATK to adverse consequences.

ATK is subject to extensive and complex U.S. Government procurement laws and regulations, along with ongoing U.S. Government audits and reviews of contract procurement, performance, and administration. ATK could suffer adverse consequences if it were to fail to comply, even inadvertently, with these laws and regulations or with laws governing the export of controlled products and commodities, or commit a significant violation of any other federal law. These consequences could include contract termination, civil and criminal penalties, and, under certain circumstances, ATK's suspension and debarment from future U.S. Government contracts for a period of time. In addition, foreign sales are subject to greater variability and risk than ATK's domestic sales. Foreign sales subject ATK to numerous stringent U.S. and foreign laws and regulations, including regulations relating to import-export control, exchange controls, the Foreign Corrupt Practices Act, and the anti-boycott provisions of the U.S. Export Administration Act. Failure to comply with these laws and regulations could result in material adverse consequences to ATK.

Novation of U.S. Government contracts involves risk.

When U.S. Government contracts are transferred from one contractor to another, such as in connection with the sale of a business, the U.S. Government may require that the parties enter into a novation agreement. A novation agreement generally provides that:

•

the transferring contractor guarantees or otherwise assumes liability for the performance of the acquiring contractor's obligations under the contract,

•

the acquiring contractor assumes all obligations under the contract, and

•

the U.S. Government recognizes the transfer of the contract and related assets.

If the U.S. Government elects not to novate a particular contract, we may not recognize the full value of that contract over its lifetime.

ATK is subject to intense competition in the commercial ammunition, firearms, and accessories markets.

In the commercial ammunition and accessories markets, ATK competes against manufacturers that have well-established brand names and strong market positions. Competition in these markets is based upon a number of factors, including price, quality, product innovation, performance, reliability, styling, product features and warranties as well as sales and marketing programs. Certain of our competitors may be more diversified and have financial and marketing resources that are substantially greater than ours, which may allow these competitors to invest more heavily in intellectual property, product development and advertising. If we are not able to compete with new products of our competitors, our future business performance may be materially and adversely affected. Internationally, our products typically face more competition where foreign competitors manufacture and market products in their respective countries. This may allow those competitors to sell products at lower prices, which could adversely affect our competitiveness. In addition, our commercial ammunition and accessories products compete with many other sporting and recreational products for the discretionary spending of consumers. A failure to effectively compete with these other competitors could have a material adverse effect on our performance.

In addition, the success of ATK’s Sporting Group depends on the continued strength of its brands. ATK believes that its brands are significant contributors to the success of its business and that maintaining and enhancing the brands are important to expanding ATK’s customer base. Failure to continue to promote and protect ATK’s brands may adversely affect ATK’s business and results of operations.

We are also subject to antitrust and competition laws of the United States and throughout the world. These laws are designed to prohibit agreements among companies that fix prices, divide markets, limit production or otherwise impede or weaken market forces. A violation of these laws could result in significant fines and penalties and could have a material adverse effect on our business.

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ATK could experience changes in demand and manufacturing costs for ammunition.

Inherent in a consumer-based market, there is a risk that demand could soften, which could have an impact on ATK operating results. ATK could experience changes in demand and manufacturing costs for ammunition. In recent years, ATK has seen a significant increase in demand for ammunition. Although ATK services a broad base of customers, there is no assurance the recent growth rate can be sustained, which could have an impact on the Company's operating results. In addition, ATK may not be able to increase our capacity in time to satisfy increases in demand that may occur from time to time and may not have adequate financial resources to increase capacity to meet demand. Capacity constraints may prevent the Company from satisfying customer orders and result in a loss of market share to competitors. In addition, ATK may suffer excess capacity and increased overhead if the Company increases capacity to meet actual or anticipated demand and that demand decreases or does not materialize.

Changes in the regulation of the manufacture, sale and purchase of firearms and ammunition could adversely affect ATK.

The manufacture, sale and purchase of firearms and ammunition are also subject to extensive governmental regulation on the federal, state and local levels. Changes in regulation could materially adversely affect our business by restricting the types of products we manufacture or sell or by imposing additional costs on us or our customers in connection with the manufacture or sale of our products. Regulatory proposals, even if never enacted, may affect firearms or ammunition sales as a result of consumer perceptions. While we do not believe that existing federal and state legislation relating to the regulation of firearms and ammunition have had a material adverse effect on our sales, no assurance can be given that more restrictive regulations, if proposed or enacted, will not have a material adverse effect on us in the future.

ATK's products may expose it to potential product liability, warranty liability or personal injury claims relating to the use of those products. The resolution of such claims is not expected to have a material adverse effect on ATK's business, and ATK maintains insurance coverage to mitigate a portion of these risks, which we believe to be adequate. However, ATK's reputation may be adversely affected by such claims, whether or not successful, including potential negative publicity about its products.

ATK is exposed to other risks associated with expansion into new and adjacent commercial markets.

ATK's long-term business growth strategy includes further expansion into markets such as commercial aerospace structures. Such efforts involve a number of risks, including increased capital expenditures, market uncertainties, schedule delays, performance risk, extended payment terms, diversion of management attention, additional credit risk associated with new customers, and costs incurred in competing with companies with strong brand names and market positions. An unfavorable event or trend in any one or more of these factors could adversely affect ATK's operating results, financial condition, or cash flows.

ATK is exposed to risks associated with the recent expansion of its Sporting Group through acquisitions, which could impact future financial results.

In fiscal 2014, ATK acquired Caliber Company, the parent company of Savage Sports Corporation ("Savage"), a leading manufacturer of sporting long guns, and also acquired Bushnell Group Holdings, Inc. ("Bushnell"), a leading global designer, marketer and distributor of branded sports optics, outdoor accessories and performance eyewear. The acquisitions of Savage and Bushnell involve a number of risks, including the risk that the anticipated benefits and cost savings from the acquisitions may not be fully realized or may take longer than expected to realize, costs and difficulties related to the integration of the two acquired companies with ATK's operations, and unanticipated liabilities or contingencies. These and other risks relating to the Savage and Bushnell acquisitions could have an adverse impact on our business, operating results, financial condition, or cash flows.

International sales are subject to greater risks that sometimes are associated with doing business in foreign countries.

Over the next several years, ATK intends to focus on the expansion of our business into international markets. In fiscal 2014, approximately 12% of ATK's sales were to foreign customers, compared to 10% in the prior year. ATK's international business may pose greater risks than its business in the United States because in some countries there is increased potential for changes in economic, legal and political environments. ATK's international business is also sensitive to changes in a foreign government's national priorities and budgets. International transactions frequently involve increased financial and legal risks arising from differing legal systems and customs in other countries. In addition, some international customers require contractors to agree to offset programs that may require in-country purchases or manufacturing or financial support arrangements as a condition to awarding contracts. The contracts may include penalties in the event the Company fails to perform in accordance with the offset requirements. Furthermore, the expansion of ATK’s international business may create

13

more difficulties and risks to ATK with respect to the maintenance of an integrated supply chain network. An unfavorable event or trend in any one or more of these factors could adversely affect ATK's operating results, financial condition, or cash flows. Foreign sales subject ATK to numerous stringent U.S. and foreign laws and regulations, including regulations relating to import-export control, exchange controls, the Foreign Corrupt Practices Act and certain other anti-corruption laws, and the anti-boycott provisions of the U.S. Export Administration Act. Failure to comply with these laws and regulations could result in material adverse consequences to ATK.

ATK is required to comply with extensive regulation of its defense products, ammunition, firearms and accessories, including those rules and regulations administered by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Department of Homeland Security, the U.S. Department of State and the U.S. Department of Commerce. These laws include, but are not limited to, the Foreign Corrupt Practices Act (FCPA), International Traffic in Arms Regulations (ITAR), the Chemical Facility Anti-Terrorism Standards (CFATS), and the Consumer Products Safety Act. Compliance with these laws is costly and time consuming. A violation of these laws could result in significant fines and penalties and could have a material adverse effect on our business.

ATK is exposed to market risk from changes in foreign currency exchange rates which could negatively impact profitability.

Sales and purchases in currencies other than the U.S. dollar expose ATK to fluctuations in foreign currencies relative to the U.S. dollar and may adversely affect ATK's results of operations. Currency fluctuations may affect product demand and prices ATK pays for materials and, as a result, the Company's operating margins may be negatively impacted. Fluctuations in exchange rates may give rise to translation gains or losses when financial statements of ATK's non-U.S. businesses are translated into U.S. dollars. While ATK monitors our exchange rate exposures and seek to reduce the risk of volatility through hedging activities, such activities bear a financial cost and may not always be available to ATK or successful in significantly mitigating such volatility.

ATK has a substantial amount of debt, and the cost of servicing that debt could adversely affect ATK's business and hinder ATK's ability to make payments on its debt.

As of March 31, 2014, ATK had total debt of $2.1 billion. In addition, ATK had $141.8 million of outstanding but undrawn letters of credit and, taking into account these letters of credit, an additional $558.2 million of availability under its revolving credit facility. Additional information on ATK's debt can be found under "Liquidity and Capital Resources" in Item 7 of this report.

ATK has demands on its cash resources in addition to interest and principal payments on its debt including, among others, operating expenses. These significant demands on ATK's cash resources could:

•

make it more difficult for ATK to satisfy its obligations,

•

require ATK to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing the amount of cash flow available for working capital, capital expenditures, acquisitions, share repurchases, dividends, and other general corporate purposes,

•

limit ATK's flexibility in planning for, or reacting to, changes in the defense and aerospace industries,

•

place ATK at a competitive disadvantage compared to competitors that have lower debt service obligations and significantly greater operating and financing flexibility,

•

limit, along with the financial and other restrictive covenants applicable to ATK's indebtedness, among other things, ATK's ability to borrow additional funds,

•

increase ATK's vulnerability to general adverse economic and industry conditions, and

•

result in a default event upon a failure to comply with financial covenants contained in ATK's senior credit facilities which, if not cured or waived, could have a material adverse effect on ATK's business, financial condition, or results of operations.

ATK's ability to pay interest on and repay its long-term debt and to satisfy its other liabilities will depend upon future operating performance and ATK's ability to refinance its debt as it becomes due. ATK's future operating performance and ability to refinance will be affected by prevailing economic conditions at that time and financial, business and other factors, many of which are beyond ATK's control.

14

If ATK is unable to service its indebtedness and fund operating costs, ATK will be forced to adopt alternative strategies that may include:

There can be no assurance that any such strategies could be implemented on satisfactory terms, if at all.

The level of returns on pension and postretirement plan assets, changes in interest rates and other factors could affect ATK's earnings and cash flows.

ATK's earnings may be positively or negatively impacted by the amount of expense or income recorded for employee benefit plans, primarily pension plans and other postretirement plans. Generally accepted accounting principles ("GAAP") in the United States of America require ATK to calculate income or expense for the plans using actuarial valuations. These valuations are based on assumptions made relating to financial market and other economic conditions. Changes in key economic indicators can result in changes in these assumptions. The key year-end assumptions used to estimate pension and postretirement benefit expense or income for the following year are the discount rate, the expected long-term rate of return on plan assets, the rate of increase in future compensation levels, mortality rates, and the health care cost trend rate. ATK is required to remeasure its plan assets and benefit obligations annually, which may result in a significant change to equity through other comprehensive income (loss). ATK's pension and other postretirement benefit income or expense can also be affected by legislation or other regulatory actions. Additional information on how ATK's financial statements can be affected by pension plan accounting policies can be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the section titled "Critical Accounting Policies" in Item 7 of this report.

ATK's business could be negatively impacted by security threats, including cyber security and other industrial, insider and physical security threats, and other disruptions.

As a U.S. defense contractor, ATK faces cyber threats, threats to the physical security of our facilities and employees, and terrorist acts, as well as the potential for business disruptions associated with information technology failures, natural disasters, or public health crises. ATK also faces the risk of economic espionage, which involves the targeting or acquisition of sensitive financial, trade, proprietary or technological information.

ATK routinely experiences cyber security threats, threats to our information technology infrastructure and attempts to gain access to ATK's sensitive information, as do our customers, suppliers, subcontractors and joint venture partners. ATK may experience similar security threats at customer sites that we operate and manage as a contractual requirement.

Prior cyber attacks directed at ATK have not had a material impact on our financial results, and ATK believes the threat detection and mitigation processes and procedures are adequate. The threats ATK faces vary from attacks common to most industries to more advanced and persistent, highly-organized adversaries who target us because we protect national security information. If ATK is unable to protect sensitive information, our customers or governmental authorities could question the adequacy of our threat mitigation and detection processes and procedures. Due to the evolving nature of these security threats, however, the impact of any future incident cannot be predicted.

Although ATK works cooperatively with our customers, suppliers, subcontractors, joint venture partners, and acquired entities to seek to minimize the impact of cyber threats, other security threats or business disruptions, ATK must rely on the safeguards put in place by these entities, which may affect the security of our information. These entities have varying levels of cyber security expertise and safeguards and their relationships with government contractors, such as ATK, may increase the likelihood that they are targeted by the same cyber threats ATK faces.

The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. Occurrence of any of these events could adversely affect our internal operations, the services ATK provide to our customers, loss of competitive advantages derived from our research and development efforts or other intellectual property, early obsolescence of our products and services, our future financial results, our reputation or our stock price.

Disruptions in the supply of key raw materials and difficulties in the supplier qualification process, as well as increases in prices of raw materials, could adversely impact ATK.

diethylether, x-ray film, plasticizers and nitrate esters, impregnated ablative materials, various natural and synthetic rubber compounds, polybutadiene, acrylonitrile, and ammonium perchlorate. ATK also purchases chemicals; electronic, electro-mechanical and mechanical components; subassemblies; and subsystems that are integrated with the manufactured parts for final assembly into finished products and systems.

ATK monitors sources of supply to attempt to assure that adequate raw materials and other supplies needed in manufacturing processes are available. As a U.S. Government contractor, ATK is frequently limited to procuring materials and components from sources of supply approved by the U.S. DoD. In addition, as business conditions, the DoD budget, and Congressional allocations change, suppliers of specialty chemicals and materials sometimes consider dropping low volume items from their product lines, which may require, as it has in the past, qualification of new suppliers for raw materials on key programs. The supply of ammonium perchlorate, a principal raw material used in ATK's operations, is limited to a single source that supplies the entire domestic solid propellant industry. This single source, however, maintains two separate manufacturing lines a reasonable distance apart, which mitigates the likelihood of a fire, explosion, or other problem impacting all production. ATK may also rely on one primary supplier for other production materials. Although other suppliers of the same materials may exist, the addition of a new supplier may require ATK to qualify the new source for use. The qualification process may impact ATK's profitability or ability to meet contract deliveries.

Certain suppliers of materials used in the manufacturing of rocket motors have discontinued the production of some materials. These materials include certain insulation and resin materials for rocket motor cases and aerospace-grade rayon for nozzles. ATK has qualified new replacement materials for some programs. For other programs, ATK or ATK's customer has procured sufficient inventory to cover current program requirements and is in the process of qualifying new replacement materials to be qualified in time to meet future production needs. ATK's profitability may be affected if unforeseen difficulties in developing and qualifying replacement materials occur.

ATK is also impacted by increases in the prices of raw materials used in production on commercial and fixed-price business. ATK has seen a significant fluctuation in the prices of commodity metals, including copper, lead, steel and zinc. The fluctuating costs of natural gas and electricity also have an impact on the cost of operating ATK's factories.

Prolonged disruptions in the supply of any of ATK's key raw materials, difficulty completing qualification of new sources of supply, implementing use of replacement materials or new sources of supply, or a continuing increase in the prices of raw materials and energy could have a material adverse effect on ATK's operating results, financial condition, or cash flows.

New regulations related to conflict minerals may force ATK to incur additional expenses.

The SEC has adopted additional disclosure requirements related to certain minerals sourced from the Democratic Republic of Congo and surrounding countries, or "conflict minerals," that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by an SEC reporting company. The minerals that the final rules cover are commonly referred to as "3TG" and include tin, tantalum, tungsten and gold. Implementation of the new disclosure requirements could affect the sourcing and availability of some of the minerals that ATK uses in the manufacture of its products. ATK's supply chain is complex, and ATK may not be able to conclusively verify whether conflict minerals are used in its products or whether its products are "conflict free." ATK could incur significant costs related to the compliance process, including potential difficulty or added costs in satisfying the disclosure requirements.

ATK relies on subcontracts with other companies to perform a portion of the services ATK provides its customers on many of its contracts. There is a risk that ATK may have disputes with its subcontractors, including disputes regarding the quality and timeliness of work performed by the subcontractor, customer concerns about the subcontract, ATK's failure to extend existing task orders or issue new task orders under a subcontract, or ATK's hiring of personnel of a subcontractor. A failure by one or more of ATK's subcontractors to satisfactorily provide on a timely basis the agreed-upon supplies or perform the agreed-upon services may materially and adversely impact ATK's ability to perform its obligations as the prime contractor. Subcontractor performance deficiencies could result in a customer limiting payments or terminating a contract for default. A default termination could expose ATK to liability and have a material adverse effect on the ability to compete for future contracts and orders.

A portion of ATK’s workforce belongs to unions. Failure to successfully negotiate or renew collective bargaining agreements, or strikes, slow-downs or other labor-related disruptions, could adversely affect ATK’s operations and could result in increased costs that impair its financial performance.

Some of ATK’s employees are covered by collective bargaining agreements, which expire on various dates. ATK is currently negotiating an initial collective bargaining agreement with employees at one of its locations. Strikes, slow-downs or

16

other labor-related disruptions could occur if ATK is unable to either negotiate or renew these agreements on satisfactory terms, which could adversely impact the Company’s operating results. The terms and conditions of new or renegotiated agreements could also increase ATK’s costs or otherwise affect its ability to fully implement future operational changes to enhance its efficiency.

ATK's future success and growth will depend significantly on its ability to develop new technologies and products that achieve market acceptance within acceptable margins while maintaining a qualified workforce to meet the needs of its customers.

Virtually all of the products produced and sold by ATK are highly engineered and require sophisticated manufacturing and system integration techniques and capabilities. ATK's commercial and government businesses both operate in global markets that are characterized by rapidly changing technologies, industry standards, market trends and customer demands. The product and program needs of ATK's government and commercial customers change and evolve regularly. Accordingly, ATK's future performance depends on its ability to identify emerging technological trends, develop and manufacture competitive products, enhance our products by adding innovative features that differentiate our products from those of our competitors, and bring those products to market quickly at cost-effective prices.

Our ability to develop new products based on technological innovation can affect our competitive position and requires the investment of significant resources. These development efforts divert resources from other potential investments in our businesses, and they may not lead to the development of new technologies or products on a timely basis or that meet the needs of our customers as fully as competitive offerings. In addition, the markets for our products may not develop or grow as we anticipate. The failure of our technologies or products to gain market acceptance due to more attractive offerings by our competitors could significantly reduce our revenues and adversely affect our competitive standing and prospects.

In addition, because of the highly specialized nature of its business, ATK must be able to hire and retain the skilled and appropriately qualified personnel necessary to perform the services required by its customers. ATK's operating results, financial condition, or cash flows may be adversely affected if it is unable to develop new products that meet customers' changing needs or successfully attract and retain qualified personnel.

Due to the volatile and flammable nature of its products, fires or explosions may disrupt ATK's business.

Many of ATK's products involve the manufacture and/or handling of a variety of explosive and flammable materials. From time to time, these activities have resulted in incidents which have temporarily shut down or otherwise disrupted some manufacturing processes, causing production delays and resulting in liability for workplace injuries and fatalities. ATK has safety and loss prevention programs which require detailed pre-construction reviews of process changes and new operations, along with routine safety audits of operations involving explosive materials, to mitigate such incidents, as well as a variety of insurance policies. However, ATK cannot ensure that it will not experience similar incidents in the future or that any similar incidents will not result in production delays or otherwise have a material adverse effect on its results of operations, financial condition, or cash flows.

ATK is subject to environmental laws and regulations that govern both past practices and current compliance which may expose ATK to adverse consequences.

ATK's operations and ownership or use of real property are subject to a number of federal, state and local environmental laws and regulations, as well as applicable foreign laws and regulations, including those for discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. At certain sites that ATK owns or operates or formerly owned or operated, there is known or potential contamination that ATK is required to investigate, remediate, or provide resource restoration. ATK could incur substantial costs, including remediation costs, resource restoration costs, fines, and penalties, or third party property damage or personal injury claims, as a result of liabilities associated with past practices or violations of environmental laws or non-compliance with environmental permits.

ATK expects that a portion of its environmental compliance and remediation costs will be recoverable under U.S. Government contracts. Some of the remediation costs that are not recoverable from the U.S. Government that are associated with facilities purchased in a business acquisition may be covered by various indemnification agreements.

While ATK has environmental management programs in place to mitigate risks, environmental laws and regulations have not had a material adverse effect on ATK's operating results, financial condition, or cash flows in the past, and it is difficult to predict whether they will have a material impact in the future.

As of March 31, 2014, ATK had a total of $199 million of convertible senior subordinated notes outstanding, subject to the terms of the indenture. The indenture requires ATK to satisfy up to the principal amount of these notes solely in cash. In

17

addition, the indenture requires ATK to pay any additional amounts above the principal amount of the notes in cash, common stock, or a combination of cash and common stock at ATK's discretion. As the price of ATK's common stock increases above the conversion price of the notes, ATK includes the dilutive impact of the number of shares that would be issued if converted, which decreases earnings per share. As of March 31, 2014, the stock price condition had been satisfied and the notes were convertible and continue to be convertible, at the option of the holder, through June 29, 2014, and will remain convertible so long as ATK’s stock price continues to meet the 130%-of-conversion-price condition.

ATK is also exposed to the risk of fluctuation in interest rates. If interest rates increase, ATK may incur increased interest expense on variable interest-rate debt or short-term borrowings, which could have an adverse impact on ATK's operating results and cash flows.

ATK may pursue or complete acquisitions, or other transactions, which represent additional risk and could impact future financial results.

ATK's business strategy includes the potential for future acquisitions or other transactions, including the announced spin-off of the Sporting Group and ATK's merger with Orbital Sciences Corporation. Acquisitions involve a number of risks including integration of the acquired company with ATK's operations and unanticipated liabilities or contingencies related to the acquired company. ATK cannot ensure that the expected benefits of any future acquisitions or other transactions will be realized. Costs could be incurred on pursuits or proposed acquisitions that have not yet or may not close which could significantly impact ATK's operating results, financial condition, or cash flows. Additionally, after the acquisition, unforeseen issues could arise which adversely affect the anticipated returns or which are otherwise not recoverable as an adjustment to the purchase price. Even after careful integration efforts, actual operating results may vary significantly from initial estimates. Furthermore, ATK may engage in other strategic business transactions. Such transactions could cause unanticipated costs and difficulties, may not achieve intended results, and may require significant time and attention from management which could have an adverse impact on our business, operating results, financial condition, or cash flows.

ATK's profitability could be impacted by unanticipated changes in its tax provisions or exposure to additional income tax liabilities.

ATK's business operates in many locations under government jurisdictions that impose income taxes. Changes in domestic or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed or changes in the taxability of certain revenues or the deductibility of certain expenses, thereby affecting income tax expense and profitability. In addition, audits by income tax authorities could result in unanticipated increases in income tax expense.

ATK is involved in a number of legal proceedings. We cannot predict the outcome of litigation and other contingencies with certainty.

ATK is subject to lawsuits, investigations, and disputes (some of which involve substantial amounts claimed) which arise out of the conduct of ATK's business including matters relating to commercial transactions, government contracts, product liability, prior acquisitions and divestitures, employment, employee benefits plans, intellectual property, import and export matters, and environmental, health and safety matters. Resolution of these matters can be prolonged and costly, and ATK's business may be adversely affected by the ultimate outcome of these matters that cannot be predicted with certainty. Moreover, ATK's potential liabilities are subject to change over time due to new developments, changes in settlement strategy, or the impact of evidentiary requirements, and we may become subject to or be required to pay damage awards or settlements that could have a material adverse effect on our results of operations, cash flows, and financial condition. Additional information can be found in Item 3 of this report.

Risks Related to the Spin-Off and Merger Transaction

References to "the Company" in this section refer to ATK after giving effect to the spin-off of ATK's Sporting Group (the "Distribution") and the merger of ATK with Orbital Sciences Corporation ("Orbital") (the "Merger"), assuming the Transaction is completed.

The Transaction may not be completed on the terms or timeline currently contemplated or at all.

The completion of the Transaction is subject to certain conditions, including (1) the absence of certain legal impediments, (2) the expiration or termination of the required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (3) the effectiveness of certain filings with the Securities and Exchange Commission, (4) approval by ATK stockholders and Orbital stockholders, (5) receipt of opinions from legal counsel regarding the intended tax treatment of the Transaction, (6) the Sporting Group’s payment of the Sporting Dividend (as defined below) to ATK, and (7) other customary closing conditions. ATK cannot provide assurances that the Transaction will be consummated on the terms or timeline currently

18

contemplated, or at all. ATK has expended and will continue to expend a significant amount of time and resources on the Transaction, and a failure to consummate the Transaction as currently contemplated, or at all, could have a material adverse effect on our business and results of operations.

The trading price of our securities could be adversely affected if the Transaction is not consummated as currently contemplated, or at all. If the Transaction is not completed for any reason, the trading price of ATK’s common stock may decline to the extent that the market price of the common stock reflects positive market assumptions that the Transaction will be completed and the related benefits will be realized. ATK may also be subject to additional risks if the Transaction is not completed, including:

•

the requirement in the Transaction Agreement that, under certain circumstances, ATK pay Orbital a termination fee of $50 million and/or reimburse certain expenses up to $10 million;

•

substantial costs related to the Transaction, such as legal, accounting, financial advisory, and integration costs that have already been incurred or will continue to be incurred until closing; and

•

potential disruption to the business of ATK and distraction of its workforce and management team.

The integration of ATK and Orbital following the Merger may present significant challenges.

There will be a significant degree of difficulty and management distraction inherent in the process of establishing the Sporting Group as an independent public company and integrating ATK and Orbital. These difficulties will include:

•

the challenge of establishing the Sporting Group as a separately traded independent public company ("Sporting");

•

the challenge of integrating ATK and Orbital and carrying on the ongoing operations of each entity;

•

the necessity of coordinating geographically separate organizations;

•

the challenge of integrating the business cultures of ATK and Orbital; and

•

the potential difficulty in retaining key officers and personnel of ATK and Orbital.

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of ATK and Orbital. Members of the Company’s senior management team may be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage the combined company, service existing customers, attract new customers and develop new products or strategies. If senior management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, the Company's business could suffer. ATK cannot provide assurances that the Company will successfully or cost-effectively integrate ATK and Orbital. The failure to do so could have a material adverse effect on the Company’s business, financial condition, and results of operations.

The Company may not realize the growth opportunities and cost synergies that are anticipated from the Transaction.

The success of the Transaction will depend, in part, on the ability of the Company to realize anticipated growth opportunities and cost synergies. The Company’s success in realizing these growth opportunities and cost synergies, and the timing of this realization, depends on the successful integration of ATK’s business and operations and Orbital’s business and operations. Even if the Company is able to integrate the ATK and Orbital businesses and operations successfully, this integration may not result in the realization of the full benefits of the growth opportunities and cost synergies that ATK currently expects from this integration within the anticipated time frame or at all. For example, the Company may be unable to eliminate duplicative costs, or the benefits from the Transaction may be offset by costs incurred or delays in integrating the companies. While it is anticipated that certain expenses will be incurred, such expenses are difficult to estimate accurately, and may exceed current estimates.

The Transaction Agreement contains provisions that may discourage other companies from trying to acquire ATK.

The Transaction Agreement contains provisions that may discourage a third party from submitting a business combination proposal to ATK prior to the closing of the Merger that might result in greater value to ATK stockholders than the Transaction. The Transaction Agreement generally prohibits ATK from soliciting any acquisition proposal, and while ATK's Board of Directors may in certain circumstances change its recommendation to ATK stockholders to approve the merger, ATK may not terminate the Transaction Agreement in order to accept an alternative business combination proposal that might result in greater value to ATK stockholders than the Transaction. If the Transaction Agreement is terminated in certain circumstances, ATK may be obligated to pay Orbital a termination fee of $50 million and/or reimburse certain expenses up to $10 million, which would represent an additional cost for a potential third party seeking a business combination with ATK.

19

If the Distribution does not qualify as a tax-free spin-off under Section 355 of the Internal Revenue Code (the "Code"), including as a result of subsequent acquisitions of stock of the Company or Sporting, then the Company or ATK stockholders immediately prior to the Distribution may be required to pay substantial U.S. federal income taxes, and Sporting may be obligated to indemnify the Company for such taxes imposed on the Company.

The Distribution and the Merger are conditioned upon ATK’s receipt of an opinion of counsel to the effect that the Distribution, Merger and certain related transactions will qualify as tax-free to ATK, Sporting, Orbital and the stockholders of ATK and Orbital for U.S. federal income tax purposes. The Distribution and the Merger are also conditioned upon Orbital’s receipt of an opinion of counsel to the effect that the Merger will qualify as tax-free to Orbital and the Orbital stockholders for U.S. federal income tax purposes. The parties will not, however, seek a private letter ruling from the IRS with respect to the tax-free treatment of the Distribution, Merger or any related transactions. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. The opinions of counsel are based on, among other things, certain representations and assumptions as to factual matters made by ATK, Sporting and Orbital. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the opinions. In addition, the opinions will be based on current law, and cannot be relied upon if current law changes with retroactive effect. If the Distribution or certain related transactions were taxable, ATK stockholders would recognize income on their receipt of Sporting stock in the Distribution, and ATK would be considered to have made a taxable sale of certain of its assets to Sporting.

The Distribution will be taxable to ATK pursuant to Section 355(e) of the Code if there is a 50% or more change in ownership of either ATK or Sporting, directly or indirectly, as part of a plan or series of related transactions that include the Distribution. Because ATK stockholders will collectively own more than 50% of the ATK common stock following the Merger, the Merger alone will not cause the Distribution to be taxable to ATK under Section 355(e). However, Section 355(e) could apply if other acquisitions of stock of ATK before or after the Merger, or of Sporting after the Merger, are considered to be part of a plan or series of related transactions that include the Distribution. If Section 355(e) applied, ATK would recognize a very substantial amount of taxable gain.

Under a tax matters agreement, in certain circumstances, and subject to certain limitations, Sporting is required to indemnify the Company against taxes on the Distribution that arise as a result of actions or failures to act by Sporting, or as a result of Section 355(e) applying due to acquisitions of Sporting stock after the Distribution. In other cases, however, the Company might recognize gain on the Distribution without being entitled to an indemnification payment under the tax matters agreement. The possibility of the Company recognizing and not being indemnified for this gain may discourage, delay or prevent a third party from acquiring stock of the Company during the two years after the Merger in a transaction that stockholders of the Company might consider favorable.

The Company and Sporting may each be unable to take certain actions after the Merger because such actions could jeopardize the tax-free status of the Distribution or the Merger, and such restrictions could be significant.

The Company and Sporting are each prohibited pursuant to a tax matters agreement from taking actions or omissions that could reasonably be expected to cause the Distribution to be taxable or to jeopardize the conclusions of the opinions of counsel received by ATK or Orbital.

In particular, for two years after the Distribution, the Company and Sporting may not:

•

enter into any agreement, understanding or arrangement or engage in any substantial negotiations with respect to any transaction involving the acquisition, issuance, repurchase or change of ownership of (1) in the case of the Company, any of the Company’s capital stock and (2) in the case of Sporting, 30% or more of the Sporting capital stock, in each case together with options or other rights in respect of that capital stock, subject to certain exceptions relating to employee compensation arrangements, open market share repurchases and stockholder rights plans;

•

cease to be engaged in the active conduct of, or sell or transfer more than 30% of the gross assets or gross consolidated assets of, certain businesses;

•

redeem or otherwise repurchase its capital stock, subject to certain exceptions provided by the tax matters agreement; or

•

liquidate, whether by merger, consolidation or otherwise.

Nevertheless, each party is permitted to take any of the actions described above if it obtains an opinion of counsel that is reasonably acceptable to the other party (or an IRS private letter ruling) to the effect that the action will not affect the tax-free status of the Distribution, Merger or certain related transactions. The receipt of any such ruling or opinion in respect of an action Sporting proposes to take will not relieve Sporting of any obligation it has to indemnify the Company if that action causes the Distribution, Merger or certain related transactions to be taxable to the Company.

20

Because of these restrictions, for two years after the Merger, the Company and Sporting may each be limited in the amount of capital stock they can issue to make acquisitions or to raise additional capital. Also, Sporting’s indemnity obligation to the Company may discourage, delay or prevent a third party from acquiring control of Sporting during this two-year period in a transaction that stockholders of Sporting might consider favorable.

As a result of the Merger, current ATK stockholders will, in the aggregate, have a significantly reduced ownership and voting interest in the Company.

After the Merger’s completion, ATK stockholders will, in the aggregate, own a significantly smaller percentage of the Company than they will collectively own of ATK immediately prior to the Merger. Current ATK stockholders will collectively own approximately 53.8% of the Company’s outstanding equity on a fully diluted basis immediately following the closing of the Merger. Consequently, ATK stockholders immediately prior to the Merger, collectively, will be able to exercise less influence over the management and policies of the Company than they could exercise over the management and policies of ATK immediately prior to the Merger. In addition, upon consummation of the Merger, the board of directors of the Company will consist of 16 members, composed of nine Orbital designees and seven ATK designees.

The pendency of the Transaction could adversely affect the business and operations of ATK and Orbital and may result in the departure of key personnel.

In connection with the pending Distribution and Merger, some customers of each of ATK and Orbital may delay or defer decisions or may end their relationships with the relevant company, which could negatively affect the revenues, earnings and cash flows of ATK and Orbital, regardless of whether the Transaction is completed. Similarly, current and prospective employees of ATK and Orbital business may experience uncertainty about their future roles with the Company following the Transaction, which may materially adversely affect the ability of each of ATK and Orbital to attract and retain key personnel during the pendency of the Transaction. In addition, certain key personnel, including our CEO, are expected to leave ATK and work for Sporting after the completion of the Transaction.

ITEM 1B. UNRESOLVED STAFF COMMENTS

There are no unresolved staff comments as of the date of this report.

ITEM 2. PROPERTIES

Facilities. As of March 31, 2014, ATK occupied manufacturing, assembly, warehouse, test, research, development, and office facilities having a total floor space of approximately 19 million square feet. These facilities are either owned or leased, or are occupied under facilities-use contracts with the U.S. Government.

As of March 31, 2014, ATK's operating segments had significant operations at the following locations:

Note: As a result of recent acquisitions ATK occupies a number of small facilities in countries around the world, which are not included above.

21

The following table summarizes the floor space, in thousands of square feet, occupied by each operating segment as of March 31, 2014:

Owned

Leased

Government

Owned(1)

Total

Aerospace Group

5,321

3,557

479

9,357

Defense Group

695

897

4,365

5,957

Sporting Group

1,968

1,425

—

3,393

Corporate

—

155

—

155

Total

7,984

6,034

4,844

18,862

Percentage of total

42

%

32

%

26

%

100

%

____________________________________

(1)

These facilities are occupied under facilities contracts that generally require ATK to pay for all utilities, services, and maintenance costs.

Land. ATK also uses land that it owns or leases for assembly, test, and evaluation, in Brigham City, Corrine, and Magna, UT, which is used by Aerospace Group; and in Elk River, MN, and Socorro, NM, which are used by Defense Group.

ATK personnel occupy space at the following facilities that are not owned or operated by ATK: Marshall Space Flight Center, Huntsville, AL; Kennedy Space Center, Cape Canaveral, FL; Vandenberg Air Force Base, Vandenberg, CA; and Picatinny Arsenal, Picatinny, NJ. The square footage of these facilities is included in the table above.

ATK's properties are well maintained and in good operating condition and are sufficient to meet ATK's near-term operating requirements.

ITEM 3. LEGAL PROCEEDINGS

From time to time, ATK is subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of ATK's business. ATK does not consider any of such proceedings that are currently pending, individually or in the aggregate, notwithstanding that the unfavorable resolution of any matter may have a material effect on our net earnings in any particular quarter, to be material to its business or likely to result in a material adverse effect on its future operating results, financial condition, or cash flows.

On or about April 10, 2006, a former ATK employee filed a qui tam complaint in federal court in Utah alleging that ATK knowingly submitted claims for payment to the U.S. Government for defective LUU series illuminating flares that failed to conform to certain safety specifications and falsely certified compliance with those specifications. On January 23, 2012, the parties met in a mediation session that resulted in an agreement to settle the lawsuit. As a result of the settlement agreement, ATK established a litigation accrual of $25.5 million during fiscal 2012. This payment was made in April 2012. An additional warranty accrual of approximately $10.7 million was recorded during fiscal 2012 as the Company agreed to retrofit up to 76,000 flares as part of the settlement.

On July 30, 2013, Raytheon Company filed a lawsuit against ATK in the Superior Court of the State of Arizona. The suit involves ATK's longstanding production of rocket motors used in Raytheon's Advanced Medium-Range Air-to-Air Missiles (AMRAAM). In the filing, Raytheon's primary allegation is that ATK breached certain of the production contracts by not delivering rocket motors. Raytheon is claiming damages exceeding $100 million. ATK disputes the allegations of Raytheon's complaint. Although it is not possible at this time to predict the outcome of the litigation, ATK believes, based on all currently available information, that the outcome will not have a material adverse effect on its operating results, financial condition or cash flows. As a result of the uncertainty regarding the outcome of this matter, no provision has been made in the financial statements with respect to this contingent liability.

On November 4, 2013, ATK filed a lawsuit against Spirit Aerosystems Inc. in the Second District Court in Farmington, Utah. In its suit, ATK has made various claims, including breach of contract, in relation to a contract with Spirit Aerosystems regarding the manufacture of aircraft parts. ATK is claiming damages of approximately $72 million. Spirit Aerosystems has disputed ATK’s allegations and in its response to ATK’s complaint it asserted a number of affirmative defenses and counterclaims. Although it is not possible at this time to predict the outcome of the litigation, ATK believes, based on all currently available information, that the outcome will not have a material adverse effect on its operating results, financial condition, or cash flows.

On May 5, 2014, a purported stockholder class action and derivative complaint was filed in the Circuit Court of Arlington County, Virginia by Michael Blank, who claims to be a stockholder of Orbital, alleging, among other things, that the directors

22

of Orbital breached their fiduciary duties in connection with the Transaction between Orbital and ATK, as described above, and alleging that ATK aided and abetted such breaches of fiduciary duty. A similar purported class action was filed on May 9, 2014, by Gregory Ericksen in the Court of Chancery of the State of Delaware. Plaintiffs in Virginia and Delaware seek, among other relief, to enjoin the Transaction (or, in the Delaware action, to rescind it in the event it is consummated). ATK believes the allegations and claims asserted in the complaints in the Virginia and Delaware actions to be without merit and intends to defend those actions vigorously.

U.S. Government Investigations. ATK is also subject to U.S. Government investigations from which civil, criminal, or administrative proceedings could result. Such proceedings could involve claims by the U.S. Government for fines, penalties, compensatory and treble damages, restitution, and/or forfeitures. Under government regulations, a company, or one or more of its operating divisions or subdivisions, can also be suspended or debarred from government contracts, or lose its export privileges, based on the results of investigations. ATK believes, based upon all available information, that the outcome of any such pending government investigations will not have a material adverse effect on its operating results, financial condition, or cash flows.

Environmental Liabilities. ATK's operations and ownership or use of real property are subject to a number of federal, state, and local laws and regulations, including those for discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. Due in part to their complexity and pervasiveness, such laws and regulations have resulted in ATK being involved with a number of related legal proceedings, claims, and remediation obligations. ATK routinely assesses, based on in-depth studies, expert analyses, and legal reviews, its contingencies, obligations, and commitments for remediation of contaminated sites and past practices, including assessments of ranges and probabilities of recoveries from other responsible parties. ATK's policy is to accrue and charge to expense in the current period any identified exposures related to environmental liabilities based on estimates of investigation, cleanup, monitoring, and resource restoration costs to be incurred.

ATK has been identified as a potentially responsible party (“PRP”), along with other parties, in several regulatory agency actions associated with hazardous waste sites. As a PRP, we may be required to pay a share of the costs of the investigation and clean-up of these sites. While uncertainties exist with respect to the amounts and timing of the ultimate environmental liabilities, based on currently available information, we have concluded that these matters, individually or in the aggregate, will not have a material adverse effect on our operating results, financial condition, or cash flows.

ATK could incur substantial costs, including cleanup costs, resource restoration, fines, and penalties or third-party property damage or personal injury claims, as a result of violations or liabilities under environmental laws or non-compliance with environmental permits. While environmental laws and regulations have not had a material adverse effect on ATK's operating results, financial condition, or cash flows in the past, and ATK has environmental management programs in place to mitigate these risks, it is difficult to predict whether they will have a material impact in the future.

The description of certain environmental matters contained in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the heading "Contingencies" is incorporated herein by reference.

ATK's common stock is listed and traded on the New York Stock Exchange under the symbol "ATK". The following table presents the high and low sales prices of the common stock for the periods indicated:

Period

High

Low

Fiscal 2014:

Quarter ended March 31, 2014

$

145.16

$

119.30

Quarter ended December 29, 2013

123.34

95.16

Quarter ended September 29, 2013

103.77

81.92

Quarter ended June 30, 2013

82.44

69.12

Fiscal 2013:

Quarter ended March 31, 2013

$

72.57

$

60.34

Quarter ended December 30, 2013

63.63

50.72

Quarter ended September 30, 2012

53.86

43.08

Quarter ended July 1, 2012

54.31

45.21

The number of holders of record of ATK's common stock as of May 12, 2014 was 4,941.

During fiscal 2014, ATK paid quarterly dividends of $0.26 per share for the first, second, and third quarters and $0.32 per share for the fourth quarter, totaling $35.1 million. On May 6, 2014, ATK's Board of Directors declared a quarterly cash dividend of $0.32 per share payable on June 26, 2014, to stockholders of record on June 2, 2014. We cannot be certain that ATK will continue to declare dividends in the future and, as such, the amount and timing of any future dividends are not determinable. ATK's dividend policy is reviewed by the Board of Directors in light of relevant factors, including our earnings, liquidity position, financial condition, capital requirements, and credit ratings, as well as the extent to which the payment of cash dividends may be restricted by covenants contained in ATK's 5.25% Senior Notes, 6.875% Senior Subordinated Notes and its Senior Credit Facility (as described under "Liquidity and Capital Resources" in Item 7 of this report). As of March 31, 2014, ATK's 5.25% Notes and 6.875% Senior Subordinated Notes limit the aggregate sum of dividends, share repurchases, and other designated restricted payments to an amount based on ATK's net income, stock issuance proceeds, and certain other items, less restricted payments made, since April 1, 2001. As of March 31, 2014, this limit was approximately $879 million. As of March 31, 2014, the Senior Credit Facility allows ATK to make unlimited "restricted payments" (as defined in the credit agreement), which among other items, would allow payments for future share repurchases, as long as ATK maintains a certain amount of liquidity and maintains certain senior debt limits, with a limit, when those senior debt limits are not met, of $250 million plus proceeds of any equity issuances plus 50% of net income since October 7, 2010. The Senior Credit Facility also prohibits dividend payments if loan defaults exist or the financial covenants contained in the Facility are not met.

24

Equity Compensation Plan Information

The following table gives information about ATK's common stock that may be issued upon the exercise of options, warrants and rights under each of ATK's existing equity compensation plans as of March 31, 2014:

Plan category

Number of

securities to

be issued upon

exercise of

outstanding

options, warrants

and rights

(a)

Weighted-average

exercise price of

outstanding

options, warrants

and rights

(b)

Number of

securities

remaining

available for

future issuance

under equity

compensation

plans (excluding

securities reflected

in column (a))

(c)

Equity compensation plans approved by security holders:

1990 Equity Incentive Plan(1)

Stock Options

—

$

—

—

Deferred Compensation(2)

39,440

—

—

Non-Employee Director Restricted Stock Plan(1)

—

Deferred Compensation(2)

6,924

—

—

2005 Stock Incentive Plan(3)

911,300

Stock Options

270,405

74.11

—

Performance Awards(4)

308,092

—

—

Deferred Compensation(2)

66,528

—

—

Total

691,389

$

74.11

911,300

__________________________________________________________

(1)

No additional awards may be granted under this plan.

(2)

Shares reserved for payment of deferred stock units in accordance with the terms of the plan.

(3)

Under the 2005 Stock Incentive Plan, a total of 3,982,360 shares have authorized for awards. However, beginning on August 7, 2012, a fungible share counting provision was added, under which “full-value awards (i.e., awards other than stock options and stock appreciation rights) are counted against the reserve of shares available for issuance under the plan as 2.38 shares for every one share actually issued in connection with the award. No more than 5% of the shares available for awards under the plan may be granted to ATK’s non-employee directors in the aggregate.

(4)

Shares reserved for issuance in connection with outstanding performance awards. The amount shown assumes the maximum payout of the performance shares based on achievement of the highest level of performance. The actual number of shares to be issued depends on the performance levels achieved for the respective performance periods.

25

ISSUER PURCHASES OF EQUITY SECURITIES

Period

Total Number

of Shares

Purchased(1)

Average

Price Paid

per Share

Total Number

of Shares

Purchased

as Part of

Publicly

Announced

Program

Maximum

Number of

Shares that

May Yet Be

Purchased Under

the Program(2)*

December 30 - January 26

341

$

120.37

—

January 27 - February 23

1,243

134.57

—

February 24 - March 31

23,731

137.30

—

Fiscal Quarter Ended March 31, 2014

25,315

$

136.94

—

621,592

____________________________________________________________

* The maximum number of shares that may yet be purchased under the program was calculated using the ATK closing stock price of $142.15 on March 31, 2014.

(1)

The 25,315 shares purchased represent shares withheld to pay taxes upon vesting of shares of restricted stock or payment of performance shares that were granted under ATK's incentive compensation plans.

(2)

On August 5, 2008, ATK's Board authorized the repurchase of up to 5 million shares. The Board had determined that the repurchase program would serve primarily to offset dilution from the Company's employee and director benefit compensation programs, but it could also be used for other corporate purposes, as determined by the Board. During fiscal 2012, 742,000 shares were repurchased for $50.0 million. On January 31, 2012, ATK's Board of Directors authorized a new share repurchase program of up to $200 million worth of shares of ATK common stock, executable over the next two years. ATK repurchased 1,003,938 shares for $59.5 million in fiscal 2013, and 609,922 shares for $52.1 million during fiscal 2014 under this program. On January 29, 2014, ATK's Board of Directors extended the share repurchase program through March 31, 2015. The shares were purchased from time to time in open market, block purchase, or negotiated transactions, subject to compliance with applicable laws and regulations. The repurchase authorization also allowed the Company to make repurchases under Rule 10b5-1 of the Securities Exchange Act of 1934. In accordance with the Transaction Agreement ATK entered into on April 28, 2014, ATK will not repurchase any outstanding shares prior to the closing of the transaction.

The discussion of limitations upon the payment of dividends as a result of the indentures governing ATK's debt instruments as discussed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the heading "Debt," is incorporated herein by reference.

26

STOCKHOLDER RETURN PERFORMANCE GRAPH

The following graph compares, for the five fiscal years ended March 31, 2014, the cumulative total return for ATK common stock with the comparable cumulative total return of two indexes:

Dow Jones U.S. Aerospace and Defense Index, a published industry index.

The graph assumes that on April 1, 2009, $100 was invested in ATK common stock (at the closing price on the previous trading day) and in each of the indexes. The comparison assumes that all dividends, if any, were reinvested. The graph indicates the dollar value of each hypothetical $100 investment as of March 31 in each of the years 2010, 2011, 2012, 2013, and 2014.

27

ITEM 6. SELECTED FINANCIAL DATA

Years Ended March 31

(Amounts in thousands except per share data)

2014

2013

2012

2011

2010

Results of Operations

Sales

$

4,775,128

$

4,362,145

$

4,613,399

$

4,842,264

$

4,807,666

Cost of sales

3,635,486

3,421,276

3,618,503

3,840,698

3,776,355

Gross profit

1,139,642

940,869

994,896

1,001,566

1,031,311

Operating expenses:

Research and development

62,520

64,678

66,403

64,960

75,896

Selling

203,976

162,359

169,984

164,063

168,986

General and administrative

282,840

244,189

262,923

246,817

236,084

Trade name and goodwill impairment(1)

—

—

—

—

38,008

Income before interest, loss on extinguishment of debt, income taxes, and noncontrolling interest

590,306

469,643

495,586

525,726

512,337

Interest expense, net

(79,792

)

(65,386

)

(88,620

)

(87,052

)

(77,494

)

Loss on extinguishment of debt

—

(11,773

)

—

—

—

Income before income taxes and noncontrolling interest

510,514

392,484

406,966

438,674

434,843

Income tax provision

169,428

120,243

143,762

124,963

156,473

Net Income before noncontrolling interest

341,086

272,241

263,204

313,711

278,370

Less net income attributable to noncontrolling interest

171

436

592

536

230

Net income attributable to Alliant Techsystems Inc.

$

340,915

$

271,805

$

262,612

$

313,175

$

278,140

Alliant Techsystems Inc.'s earnings per common share:

Basic

$

10.76

$

8.38

$

7.99

$

9.41

$

8.48

Diluted

$

10.42

$

8.34

$

7.93

$

9.32

$

8.33

Financial Position

Net current assets

$

1,331,448

$

1,311,877

$

1,402,758

$

995,747

$

931,163

Net property, plant, and equipment

697,551

602,320

604,498

587,749

561,931

Total assets

5,771,146

4,383,010

4,541,746

4,443,845

3,869,624

Long-term debt (including current portion)

2,092,978

1,073,877

1,302,002

1,609,709

1,393,554

Total Alliant Techsystems Inc. stockholders' equity

1,911,575

1,502,169

1,226,795

1,156,758

798,594

Other Data

Depreciation and amortization of intangible assets

$

117,776

$

106,062

$

108,885

$

111,186

$

99,830

Capital expenditures(2)

145,964

96,889

122,292

130,201

143,472

Cash dividends per common share

1.10

0.92

0.80

0.20

—

Gross margin (gross profit as a percentage of sales)

23.9

%

21.6

%

21.6

%

20.7

%

21.5

%

_________________________________________________

(1)

In fiscal 2010, ATK recorded a non-cash asset impairment charge of $38.0 million related to the decision to discontinue use of the Thiokol and MRC trade names.

(2)

Capital expenditures are shown net of capital expenditures included in accounts payable and financed through operating leases.

See Note 4 to the consolidated financial statements for a description of acquisitions made since the beginning of fiscal 2012.

28

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Some of the statements made and information contained in this report, excluding historical information, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give ATK's current expectations or forecasts of future events. Words such as "may," "will," "expected," "intend," "estimate," "anticipate," "believe," "project," or "continue," and similar expressions are used to identify forward-looking statements. From time to time, ATK also may provide oral or written forward-looking statements in other materials released to the public. Any or all forward-looking statements in this report and in any public statements ATK makes could be materially different. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Any change in the following factors may impact the achievement of results:

•

reductions or changes in NASA or U.S. Government military spending, timing of payments and budgetary policies, including impacts of sequestration under the Budget Control Act of 2011, and sourcing strategies,

•

intense competition for U.S. Government contracts and programs,

•

increases in costs, which ATK may not be able to react to due to the nature of its U.S. Government contracts,

•

changes in cost and revenue estimates and/or timing of programs,

•

the potential termination of U.S. Government contracts and the potential inability to recover termination costs

•

other risks associated with U.S. Government contracts that might expose ATK to adverse consequences,

•

government laws and other rules and regulations applicable to ATK, including procurement and import-export control,

•

the novation of U.S. Government contracts,

•

intense competition in the commercial ammunition, firearms, and accessories markets,

•

reduction or change in demand and manufacturing costs for commercial ammunition, firearms or accessories, including the risk that placed orders exceed actual customer requirements,

•

changes in the regulation of the manufacture, sale and purchase of firearms and ammunition could adversely affect ATK,

•

the manufacture and sale of products that create exposure to potential product liability, warranty liability or personal injury claims and litigation,

•

risks associated with expansion into new and adjacent commercial markets,

•

results of acquisitions or other transactions, including our ability to successfully integrate acquired businesses and realize anticipated synergies, cost savings and other benefits, and costs incurred for pursuits and proposed acquisitions that have not yet or may not close, including the announced spin-off of the Sporting Group and ATK's merger with Orbital Sciences Corporation,

•

greater risk associated with international business, including foreign currency exchange rates and fluctuations in those rates,

•

federal and state regulation of defense products, ammunition, and firearms,

(Amounts in thousands except share and per share data and unless otherwise indicated)

•

security threats, including cybersecurity and other industrial and physical security threats, and other disruptions,

•

supply, availability, and costs of raw materials and components, including commodity price fluctuations,

•

new regulations related to conflict minerals,

•

performance of ATK's subcontractors,

•

development of key technologies and retention of a qualified workforce,

•

fires or explosions at any of ATK's facilities,

•

environmental laws that govern past practices and rules and regulations, noncompliance with which may expose ATK to adverse consequences,

•

impacts of financial market disruptions or volatility to ATK's customers and vendors,

•

unanticipated changes in the tax provision or exposure to additional tax liabilities, and

•

the costs and ultimate outcome of litigation matters and other legal proceedings.

This list of factors is not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that would impact ATK's business. Additional information regarding these factors is contained in Item 1A of this report and may also be contained in ATK's filings with the Securities and Exchange Commission on Forms 10-Q and 8-K. All such risk factors are difficult to predict, contain material uncertainties that may affect actual results, and may be beyond our control.

Executive Summary

ATK is an aerospace, defense, and commercial products company and supplier of products to the U.S. Government, allied nations, and prime contractors. ATK is also a major supplier of ammunition, firearms and shooting accessories and, with the Bushnell acquisition, ATK has become a leader in the hunting, shooting sports, and outdoor recreation markets. ATK is headquartered in Arlington, VA and has operating locations throughout the United States, Puerto Rico, and internationally.

As of March 31, 2014, ATK operated in three business segments. These operating segments are defined based on the reporting and review process used by ATK's chief executive officer and other management. As of March 31, 2014, ATK's three operating groups were:

•

Aerospace Group, which generated 26% of ATK's external sales in fiscal 2014, develops and produces rocket motor systems for human and cargo launch vehicles, conventional and strategic missiles, and missile defense interceptors. They also produce small and micro-satellites, satellite components, structures and subsystems, lightweight space deployables and solar arrays, and provide engineering and technical services. Additionally, the Aerospace Group operates in the military and commercial aircraft and launch structures markets. Other products include ordnance, such as decoy and illuminating flares.

Total backlog of $7,605,000 at March 31, 2014 compared to $8,227,000 at March 31, 2013.

•

Income before interest, loss on extinguishment of debt, income taxes, and noncontrolling interest as a percentage of sales was 12.4% and 10.8% for the years ended March 31, 2014 and 2013, respectively. The current year rate reflects lower pension expense including the effect of the Radford segment close-out and improvements in the Sporting Group. The prior year rate reflects the loss of the Radford facility management contract.

•

The increase in the current period tax rate to 33.2% from 30.6% in fiscal 2013 is primarily due to the absence of the settlement of the examination of the fiscal 2009 and 2010 tax returns, partially offset by the revaluation of unrecognized tax benefits due to proposed IRS regulations.

•

ATK recorded sales and profit of $27,387 in the fourth quarter of fiscal 2014 for a pension segment close-out associated with the Radford facility contract which ended in fiscal 2013.

•

On June 21, 2013, ATK acquired Caliber Company, the parent company of Savage Sports Corporation, for $315,000 in cash, net of cash acquired, and subject to a customary working capital adjustment.

•

On November 1, 2013, ATK acquired Bushnell Group Holdings, Inc., a leading global designer, marketer and distributor of branded sports optics, outdoor accessories and performance eyewear, for $985,000 in cash, net of cash acquired, and subject to a customary working capital adjustment.

•

On November 1, 2013, ATK entered into a Third Amended and Restated Credit Agreement (the "2013 Senior Credit Facility"), which replaced the 2010 Senior Credit Facility, and issued $300,000 aggregate principal amount of 5.25% Senior Notes (the "5.25% Notes’’) that mature on October 1, 2021, to pay for the Bushnell acquisition, refinancing of the 2010 Senior Credit facility, and payment of debt financing costs.

•

During fiscal 2014, ATK paid quarterly cash dividends of $0.26 per share for the first, second, and third quarters and $0.32 for the fourth quarter, totaling $35,134.

Notable events

•

During fiscal 2014, ATK repurchased 609,922 shares for $52,130.

•

ATK's Board of Directors appointed Jay Tibbets as Senior Vice President and President Sporting Group effective July 31, 2013.

•

ATK's Board of Directors appointed Stephen Nolan as Senior Vice President Strategy and Business Development effective July 31, 2013.

•

On February 26, 2014, Michael Callahan was elected as an independent director to ATK’s Board of Directors and appointed to its Audit Committee, effective March 1, 2014.

•

On May 6, 2014, ATK’s Board of Directors declared a quarterly cash dividend of $0.32 per share, payable on June 26, 2014, to stockholders of record on June 2, 2014.

Outlook

Transaction Agreement - On April 28, 2014, we entered into a Transaction Agreement (the “Transaction Agreement”) with Vista SpinCo Inc., a Delaware corporation and a wholly owned subsidiary of ATK (“Sporting”), Vista Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of ATK, and Orbital Sciences Corporation, a Delaware corporation (“Orbital”), providing for the spin-off of our Sporting Group business to our stockholders (the “Distribution”), which will be immediately followed by the merger of Vista Merger Sub Inc. with and into Orbital (the “Merger” and together with the Distribution, the “Transaction”), with Orbital surviving the Merger as a wholly owned subsidiary of ATK. This transaction is subject to stockholder approval prior to closing.

On April 28, 2014, ATK's Sporting Group, ATK and certain financial institutions executed a commitment letter pursuant to which the financial institutions have agreed to provide debt financing to Sporting in an aggregate principal amount of $750 million, comprised of a $350 million senior secured term loan and a $400 million senior secured revolving credit facility, in each case on the terms and conditions set forth therein. Sporting will use a portion of the proceeds of the debt financing to pay a cash dividend (the “Sporting Dividend”) to ATK in an amount equal to the amount by which ATK’s gross indebtedness for borrowed money as of the closing date exceeds $1,740 million, subject to certain adjustments. ATK expects to use the proceeds

31

of the Sporting Dividend to repay a portion of ATK's debt including the 6.875% Senior Subordinated Notes due 2020 and 3.00% Convertible Senior Subordinated Notes due 2024.

In connection with the transaction, ATK intends, at the time such notes become redeemable at ATK’s option, to issue a notice of redemption with respect to any outstanding 3.00% Convertible Senior Subordinated Notes due 2024 (the “2024 Notes”) in accordance with the redemption provisions of the indenture governing the 2024 Notes. ATK has agreed to settle any 2024 Notes that are converted (whether prior to or following ATK’s notice of redemption) entirely in cash.

Government Funding—ATK is dependent on funding levels of the U.S. Department of Defense ("DoD") and NASA.

The government budget structure remains constrained by the 2011 Budget Control Act which initially reduced the DoD topline budget by approximately $490 billion over 10 years starting in fiscal year 2012. In January 2013, the American Taxpayer Relief Act of 2012 was enacted, triggering further defense budget cuts of approximately $50 billion per year (or sequestration) beginning in March 2013. Until recently, Congress and the Administration had been unable to reach a broader fiscal agreement that would amend the Budget Control Act and avoid the impacts of sequestration. For GFY13, the first round of sequestration was triggered, reducing DoD accounts by $37 billion. The NASA budget was under similar sequestration pressure but had greater flexibility to manage the reductions across the portfolio and decided to preserve funding for key priorities such as the Space Launch System ("SLS").

In GFY14, the Administration faced the threat of an additional year of sequestration and deeper cuts requiring an additional reduction of $20 billion from the defense topline budget. The Budget Control Act Amendment adopted in December 2013 provided some relief to the deeper cuts required under sequestration in GFY14 and GFY15. For defense spending, the agreement effectively holds flat the topline budget at $499 billion for both GFY14 and GFY15, providing over $30 billion in sequestration relief. For NASA, similar relief provided for non-defense discretionary spending should allow the NASA budget to remain flat over the same period at approximately $17.5 billion annually.

On January 17, 2014, Congress approved, and the President signed, the Omnibus Appropriations Act replacing the Continuing Resolution for the remainder of GFY14 and removing the threat of future government shutdowns during the year. Consistent with the budget deal, the Omnibus Appropriations Act funds the DoD at $499 billion and replaces the across-the-board sequestration cuts with specific reductions across most accounts. Total funding, and funding for most programs, remains flat at GFY13 levels. Overseas Contingency Operations funding was increased by $5 billion above the requested amount, providing some additional relief to the defense budget.

With the budget agreement now in place, sequestration (the after-the-fact across-the-board cuts) will be replaced in GFY15 with budget submissions expected to be in-line with these lower funding levels and programs adjusted to fit the lower expected funding levels. Budget pressures, such as rising personnel costs despite significant force reductions in the Army and Marine Corps, will present challenges to modernization and research and development accounts. ATK is preparing for a period where force reductions and a winding-down of overseas contingency operations, coupled with reduced training cycles and fairly healthy inventory levels for many ammunition and missile items, will result in less demand in some categories of products.

Initial review of the GFY15 President’s Budget submissions is in line with expectations and ATK FY15 plans. ATK continues to monitor potential impacts as the Congressional budget review and annual appropriations process gets underway. Final decisions on GFY15 annual appropriations would not be expected before ATK's third quarter of fiscal 2015 and may be subject to a Continuing Resolution at current levels pending political outcomes in November 2014.

The U.S. defense industry has experienced significant changes over the years. ATK's management believes that the key to ATK's continued success is to focus on performance, innovation, simplicity, and affordability. ATK is positioning itself where management believes there will be continued strong defense funding, even as pressures mount on procurement and research and development accounts. ATK will concentrate on developing systems that will extend the life and improve the capability of existing platforms. ATK anticipates budget pressures will increasingly drive the life extension of platforms such as ships, aircraft and main battle tanks.

U.S. Government contracts are also dependent on the continuing availability of Congressional appropriations. Congress usually appropriates funds for a given program on a fiscal year basis even though contract performance may take more than one year. As a result, at the outset of a major program, the contract is usually incrementally funded, and additional monies are normally committed to the contract by the procuring agency only as Congress makes appropriations for future fiscal years. In addition, most U.S. Government contracts are subject to modification if funding is changed. Any failure by Congress to appropriate additional funds to any program in which ATK participates, or any contract modification as a result of funding

32

changes, could materially delay or terminate the program. This could have a material adverse effect on ATK's operating results, financial condition, or cash flows.

The Bipartisan Budget Act of 2013, which was signed by President Obama on December 26, 2013, reduced the allowable compensation costs for employees of government contractors to $487 thousand from the current level of $952 thousand. This Act will limit the amount of compensation that ATK can propose and bill on contracts awarded after the law is codified into the Federal Acquisition Regulation, expected to be sometime within the next 12 months. This new limit will be phased in as old contracts that are subject to the old limit are completed and new contracts subject to the new limit are received. Once fully phased in, ATK believes this Act will reduce the amount of cost ATK can bid and collect.

Critical Accounting Policies

ATK's discussion and analysis of its financial condition and results of operations are based upon ATK's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. In preparing the consolidated financial statements, ATK makes estimates and judgments that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosure of contingent assets and liabilities. ATK re-evaluates its estimates on an on-going basis. ATK's estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

ATK believes the following are its critical accounting policies that affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition

A substantial portion of our sales come from contracts with agencies of the U.S. Government and its prime contractors and subcontractors. As the various U.S. Government customers, including the U.S. Army, U.S. Navy, NASA, and the U.S. Air Force, make independent purchasing decisions, we do not generally regard the U.S. Government as one customer. Instead, we view each agency as a separate customer.

Sales by customer were as follows:

Percent of Sales

For Fiscal Years Ended:

2014

2013

2012

Sales to:

U.S. Army

20

%

29

%

28

%

U.S. Navy

10

%

13

%

12

%

NASA

9

%

10

%

10

%

U.S. Air Force

4

%

6

%

6

%

Other U.S. Government customers

10

%

9

%

9

%

Total U.S. Government customers

53

%

67

%

65

%

Commercial and foreign customers

47

%

33

%

35

%

Total

100

%

100

%

100

%

Long-Term Contracts—The majority of ATK's sales to the U.S. Government and commercial and foreign customers within the Defense and Aerospace groups are accounted for as long-term contracts. Sales under long-term contracts are accounted for under the percentage-of-completion method and include cost-plus and fixed-price contracts. Sales under cost-plus contracts are recognized as costs are incurred. Sales under fixed-price contracts are either recognized as the actual cost of work performed relates to the estimate at completion ("cost-to-cost") or based on results achieved, which usually coincides with customer acceptance ("units-of-delivery"). ATK predominately accounts for revenue using the cost-to-cost method of accounting.

Profits expected to be realized on contracts are based on management estimates of total contract sales value and costs at completion. Estimated amounts for contract changes, including scope and claims, are included in contract sales only when an amount is reliably estimatible and realization is estimated to be probable. Assumptions used for recording sales and earnings are adjusted in the period of change to reflect revisions in contract value and estimated costs. In the period in which it is determined that a loss will be incurred on a contract, the entire amount of the estimated gross margin loss is charged to cost of sales. Changes in estimates of contract sales, costs, or profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current or prior periods. The

33

effect of the changes on future periods of contract performance is recognized as if the revised estimate had been used since contract inception.

Changes in contract estimates occur for a variety of reasons including changes in contract scope, unforeseen changes in contract cost estimates due to unanticipated cost growth or risks affecting contract costs and/or the resolution of contract risks at lower costs than anticipated, as well as changes in contract overhead costs over the performance period. Changes in estimates could have a material effect on the Company's consolidated financial position or annual results of operations. In fiscal 2014, 2013 and 2012, the Company recognized favorable operating income adjustments of $210,920, $215,945, and $187,718, and unfavorable operating income adjustments of $127,574, $122,568 and $80,745, respectively, consisting of changes in estimates on contracts accounted for under the percentage-of-completion method of accounting. The adjustments recorded during the year ended March 31, 2014 were primarily driven by higher profit expectations of $41,357 in the Small Caliber Systems division due to operational efficiencies, a successful in-sourcing initiative, and reduced operational risk as a contract nears completion, and for programs in the Space Systems Operations. As a result of the pension close-out settlement, the difference between pension and postretirement benefit expense calculated under Financial Accounting Standards (FAS) and the expense calculated under U.S. Cost Accounting Standards (CAS) for the Radford facility management contract resulted in Corporate recording income of $28,986 which has been excluded from the increase in operating income resulting from the cumulative catch-up method of accounting noted above.

The prior year adjustments were primarily driven by greater than expected performance of $28,261 in Small-Caliber Systems, increased production volumes in Defense Electronic Systems, better performance at the Radford facility as the contracts and sale of residual assets were completed, and increase in Space System Operations due to performance improvements. These improvements were offset by decreases in Missile Products due to requalification expenses on a program.

Contracts may contain provisions to earn incentive and award fees if specified targets are achieved as well as penalty provisions related to performance. Incentive and award fees and penalties that can be reasonably estimated and are probable are recorded over the performance period of the contract. Incentive and award fees that cannot be reasonably estimated are recorded when awarded.

The complexity of the estimation process and all issues related to assumptions, risks, and uncertainties inherent with the application of the cost-to-cost method of accounting affect the amounts reported in ATK's financial statements. A number of internal and external factors affect the cost of sales estimates, including labor rate and efficiency variances, overhead rate estimates, revised estimates of warranty costs, estimated future material prices, and customer specification and testing requirement changes. If business conditions were different, or if ATK had used different assumptions in the application of this and other accounting policies, it is likely that materially different amounts would be reported in ATK's financial statements. In the past, ATK's estimates and assumptions have been materially accurate.

Other Revenue Recognition Methodology—Sales not recognized under the long-term contract method primarily relate to sales within the Sporting Group which are recognized when persuasive evidence of an arrangement exists, the product has been delivered and legal title and all risks of ownership have been transferred, written contract and sales terms are complete, customer acceptance has occurred, and payment is reasonably assured. Sales are reduced for allowances and price discounts.

Fiscal 2014 sales by revenue recognition method were as follows:

Percent

of Sales

Sales recorded under:

Long-term contracts method

61

%

Other method

39

%

Total

100

%

Employee Benefit Plans

Defined Benefit Pension Plans. ATK's noncontributory defined benefit pension plans (the "Plans") cover substantially all employees hired prior to January 1, 2007. Eligible non-union employees hired on or after January 1, 2007 and certain union employees are not covered by a defined benefit plan but substantially all receive an employer contribution through a defined contribution plan. On January 31, 2013, the Plans were amended to freeze the current pension formula benefits effective June 30, 2013 and to implement a new cash balance formula applicable to pay and service starting July 1, 2013. The cash balance formula provides each affected employee with pay credits based on the sum of that employee's age plus years of pension service as of December 31 of each calendar year, plus 4% annual interest credits. Prior to the effective date of the amendment,

34

the Plans provide either pension benefits based on employee annual pay levels and years of credited service or based on stated amounts for each year of credited service. ATK funds the Plans in accordance with federal requirements calculated using appropriate actuarial methods. Plan assets for ATK are held in a trust and are invested in a diversified portfolio of equity investments, fixed income investments, real estate, timber, energy investments, hedge funds, private equity, and cash. For certain Plan assets where the fair market value is not readily determinable, estimates of the fair value are determined using the best available information including the most recent audited financial statements.

ATK also sponsors nonqualified supplemental executive retirement plans which provide certain executives and highly compensated employees the opportunity to receive pension benefits in excess of those payable through tax-qualified pension plans. The Company implemented similar changes as those noted above to ATK's nonqualified supplemental executive retirement plans for certain highly compensated employees.

ATK recorded pension expense for the Plans of $128,812 in fiscal 2014, a decrease of $39,140 from $167,952 of pension expense recorded in fiscal 2013. The expense related to these Plans is calculated based upon a number of actuarial assumptions, including the expected long-term rate of return on plan assets, the discount rate, and the rate of compensation increase. The following table sets forth ATK's assumptions used in determining pension expense for fiscal 2014, 2013, and 2012, and projections for fiscal 2015:

Years Ending March 31

2015

2014

2013

2012

Expected long-term rate of return on plan assets

7.25

%

7.25

%

7.50

%

8.00

%

Discount rate

4.50

%

4.35

%

4.90

%

5.60

%

Rate of compensation increase:

Union

3.22

%

3.23

%

3.26

%

3.79

%

Salaried

3.47

%

3.49

%

3.55

%

4.02

%

In developing the expected long-term rate of return assumption, ATK considers input from its actuaries and other advisors, annualized returns of various major indices over a long-term time horizon and ATK's own historical investment returns. The expected long-term rate of return of 7.25% used in fiscal 2014 for the Plans was based on an asset allocation range of 20 - 45% in equity investments, 35 - 50% in fixed income investments, 5 - 10% in real estate/real asset investments, 10 - 25% collectively in hedge fund and private equity investments, and 0 - 6% in cash investments. The expected long-term rate of return assumed for fiscal 2015 is 7.25%. The actual return in any fiscal year will likely differ from ATK's assumption, but ATK estimates its return based on long-term projections and historical results. Therefore, any variance in a given year does not necessarily indicate that the assumption should be changed.

In determining its discount rate, ATK uses the current investment yields on high-quality corporate bonds (rated AA or better) that coincide with the cash flows of the estimated benefit payouts from ATK's plans. The model uses a yield curve approach to discount each cash flow of the liability stream at an interest rate specifically applicable to the timing of the respective cash flow. The model totals the present values of all cash flows and calculates the equivalent weighted average discount rate by imputing the singular interest rate that equates the total present value with the stream of future cash flows. This resulting weighted average discount rate is then used in evaluating the final discount rate. The discount rate was 4.50%, 4.35%, and 4.90% at March 31, 2014, March 31, 2013, and March 31, 2012, respectively. The discount rate as of March 31 impacts the following fiscal year's pension expense.

Future actual pension expense can vary significantly depending on future investment performance, changes in future discount rates, legally required plan changes, and various other factors related to the populations participating in the Plans. If the assumptions of the discount rate, compensation increase, and/or expected rate of return for fiscal 2015 were different, the impact on fiscal 2015 expense would be as follows: each 0.25% change in the discount rate would change fiscal 2015 pension expense by approximately $5,000; each 0.25% change in the rate of compensation increase would change fiscal 2015 pension expense by approximately $100; and each 0.25% change in the expected rate of return on plan assets would change fiscal 2015 pension expense by approximately $6,000.

ATK bases its determination of pension expense or income on a market-related valuation of assets, which reduces year-to-year volatility. This market-related valuation recognizes investment gains or losses over a five-year period from the year in which they occur. Investment gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and the actual return based on the market-related value of assets. Since the market-related value of assets recognizes gains or losses over a five-year period, the future value of assets will be impacted as previously deferred gains or losses are recorded.

35

ATK made contributions to the qualified pension trust of $40,000 during fiscal 2014. ATK distributed $5,149 under its supplemental executive retirement plans during fiscal 2014, and expects to make distributions directly to retirees of approximately $4,500 in fiscal 2015. A substantial portion of ATK's Plan contributions are recoverable from the U.S. Government as allowable indirect contract costs at amounts generally equal to the pension plan contributions, although not necessarily in the same year the contribution is made. ATK's funded pension status was approximately 81% as of March 31, 2014.

Other Postretirement Benefits. ATK also provides postretirement health care benefits and life insurance coverage to certain employees and retirees.

The following table sets forth ATK's assumptions used to determine net periodic benefit cost for other postretirement benefit ("PRB") plans for fiscal 2014, 2013, and 2012, and projections for fiscal 2015:

Years Ending March 31

2015

2014

2013

2012

Expected long-term rate of return on plan assets:

Held solely in fixed income investments

5.00

%

5.00

%

5.00

%

6.00

%

Held in pension master trust and fixed income investments

6.25

%

6.25

%

6.25

%

7.00

%

Discount rate

3.95

%

3.80

%

4.40

%

5.00

%

Weighted average initial health care cost trend rate

6.10

%

7.60

%

7.70

%

7.60

%

Health care cost trend rates are set specifically for each benefit plan and design. Health care cost trend rates used to determine the net periodic benefit cost for employees during fiscal 2014 were as follows: under age 65 was 8.0%; over age 65 was 7.5%; and the prescription drug portion was 8.5%.

The health care cost ultimate trend rates are as follows:

Health care cost trend rate for employees under 65

5.0

%

Health care cost trend rate for employees over 65

5.0

%

Health care cost trend rate for prescription drugs

5.0

%

Weighted average health care cost trend rate

5.0

%

Each category of cost declines at a varying rate. The ultimate trend rate will be reached in fiscal 2021 for employees under age 65, in fiscal 2021 for employees over age 65, and in fiscal 2022 for prescription drugs.

In developing the expected long-term rate of return assumption for other PRB plans, ATK considers input from actuaries, historical returns, and annualized returns of various major indices over long periods. As of March 31, 2014, approximately 42% of the assets were held in a 401(h) account held within the pension master trust and are invested in the same manner as the pension assets. The expected long-term rates of returns are based on the weighted average asset allocation between the assets held within the 401(h) and those held in fixed income investments.

Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one-percentage point increase or decrease in the assumed health care cost trend rates would have the following effects:

One-Percentage

Point Increase

One-Percentage

Point Decrease

Effect on total service and interest cost

$

270

$

(240

)

Effect on postretirement benefit obligation

6,816

(6,068

)

ATK made other PRB plan contributions of $11,592 in fiscal 2014 and expects to make contributions of approximately $10,806 in fiscal 2015. A substantial portion of ATK's PRB plan contributions are recoverable from the U.S. Government as allowable indirect costs at amounts generally equal to the plan contributions, although not necessarily in the same year the contribution is made.

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act") reduced ATK's accumulated projected benefit obligation ("APBO") measured as of December 31, 2005. One of ATK's other PRB plans is actuarially equivalent to Medicare, but ATK does not believe that the subsidies it will receive under the Act will be significant. Because

36

ATK believes that participation levels in its other PRB plans will decline, the impact to ATK's results of operations in any period has not been and is not expected to be significant.

Defined Contribution Plan. ATK also sponsors a 401(k) defined contribution plan. Participation in this plan is available to substantially all U.S. employees.

Income Taxes

Provisions for federal, state, and foreign income taxes are calculated based on reported pre-tax earnings and current tax law. Such provisions differ from the amounts currently receivable or payable because certain items of income and expense are recognized in different time periods for financial reporting purposes than for income tax purposes. Significant judgment is required in determining income tax provisions and evaluating tax positions. ATK periodically assesses its liabilities and contingencies for all periods that are currently open to examination or have not been effectively settled based on the most current available information. Where it is not more likely than not that ATK's tax position will be sustained, the Company records the entire resulting tax liability and when it is more likely than not of being sustained, the Company records its best estimate of the resulting tax liability. Any applicable interest and penalties related to these positions are also recorded in the consolidated financial statements. To the extent ATK's assessment of the tax outcome of these matters changes, such change in estimate will impact the income tax provision in the period of the change. It is ATK's policy to record any interest and penalties related to income taxes as part of the income tax expense for financial reporting purposes. Deferred tax assets related to carryforwards are reduced by a valuation allowance when it is not more likely than not that the amount will be realized before expiration of the carryforward period. As part of this analysis ATK takes into account the amount and character to determine if the carryforwards will be realized. Significant estimates are required for this analysis. Changes in the amounts of valuation allowance are recorded in the tax provision in the period when the change occurs.

Acquisitions

The results of acquired businesses are included in ATK's consolidated financial statements from the date of acquisition. ATK allocates the purchase price of an acquired business to the underlying tangible and intangible acquired assets and liabilities assumed based on their fair value. Estimates are used in determining the fair value and estimated remaining lives of intangible assets until the final purchase price allocation is completed. Actual fair values and remaining lives of intangible assets may vary from those estimates. The excess purchase price over the estimated fair value of the net assets acquired is recorded as goodwill.

On April 9, 2010, ATK acquired Blackhawk for a purchase price of $172,251. Blackhawk is a manufacturer of high quality tactical gear. ATK believes that the acquisition provided ATK with a leading tactical systems brand, an expanded portfolio of quality products, and additional design and development expertise for innovative tactical accessories which strengthens ATK's position in tactical accessories and equipment for domestic and international military, law enforcement, security, and sport enthusiast markets. Blackhawk employs approximately 300 employees and is included in the Sporting Group. The purchase price allocation was completed in fiscal 2011. Most of the goodwill generated in this acquisition is deductible for tax purposes.

On June 21, 2013, ATK acquired Caliber Company, parent company of Savage Sports Corporation ("Savage"), a leading manufacturer of sporting long guns. Operating under the brand names of Savage Arms, Stevens and Savage Range Systems, the company designs, manufactures and markets centerfire and rimfire rifles, shotguns and shooting range systems used for hunting, as well as competitive and recreational target shooting. The purchase price was $315,000 net of cash acquired. ATK believes the acquisition complements ATK's growing portfolio of leading consumer brands and will allow us to build upon our offerings with Savage's prominent, respected brands known for accuracy, quality, innovation, value and craftsmanship. Savage's sales distribution channels, new product development, and sophistication in manufacturing will significantly increase ATK's presence with a highly relevant product offering to distributors, retailers and consumers. Savage employs approximately 600 employees and is included in the Sporting Group. The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. These adjustments will primarily relate to certain contingent liabilities and income tax-related items. None of the goodwill generated in this acquisition will be deductible for tax purposes.

ATK used the acquisition method of accounting to account for this acquisition and, accordingly, the results of Savage are included in ATK’s consolidated financial statements at the date of acquisition. The purchase price for the acquisition has been allocated to the acquired assets and liabilities based on estimated fair value. Pro forma information on the results of operations for fiscal 2013 as if the acquisition had occurred at the beginning of fiscal 2013 is not being presented because the acquisition is not material to ATK for that purpose. Subsequent to June 21, 2013, ATK has recorded sales of approximately $178,687 for fiscal year 2014 and income before interest, loss on extinguishment of debt, income taxes, and noncontrolling interest of

37

approximately $33,438 for fiscal year 2014 associated with the operations of this acquired business, which reflects the expense of the inventory step-up cost of $12,000 for inventory sold in fiscal year 2014.

On November 1, 2013, ATK acquired Bushnell Group Holdings, Inc. ("Bushnell"). Bushnell is a leading global designer, marketer and distributor of branded sports optics, outdoor accessories and performance eyewear. The purchase price was $985,000 net of cash acquired, subject to purchase price adjustments. ATK believes the acquisition broadens our existing capabilities in the commercial shooting sports market and expands our portfolio of branded shooting sports products. In addition, this transaction enables the Company to enter new sporting markets in golf and snow skiing. ATK will leverage Bushnell’s strong sourcing, marketing, branding and distribution capabilities and capitalize on Bushnell’s track record of successfully integrating acquisitions and delivering profitable growth. Bushnell employs approximately 1,100 employees and is included in the Sporting Group. The purchase price has been preliminarily allocated based on the estimated fair value of net assets acquired and liabilities assumed at the date of the acquisition. The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. These adjustments will primarily relate to working capital adjustments, certain contingent liabilities and income tax-related items. We expect the purchase price allocation to be completed within 12 months of the acquisition date. A portion of the goodwill generated in this acquisition will be deductible for tax purposes. Subsequent to November 1, 2013, ATK has recorded sales of approximately $217,095 for fiscal 2014 and income before interest, loss on extinguishment of debt, income taxes, and noncontrolling interest of approximately $9,177 for fiscal 2014 associated with the operations of this acquired business which reflects transition costs and $3,500 of inventory step-up costs. The income before interest, loss on extinguishment of debt, income taxes, and noncontrolling interest excludes transaction costs of $14,254 for fiscal 2014. Pro forma financial statement information has been included within Note 4 to the consolidated financial statements.

Accounting for Goodwill

ATK tests goodwill for impairment on the first day of its fourth fiscal quarter or upon the occurrence of events or changes in circumstances that indicate that the asset might be impaired. The Company has determined that the reporting units for its goodwill impairment review are its operating segments, or components of an operating segment, that constitute a business for which discrete financial information is available, and for which segment management regularly reviews the operating results. Based on this analysis, the Company has identified 10 reporting units within its reportable segments as of the fiscal 2014 testing date.

The goodwill impairment test is performed using a two-step process. In the first step, ATK determines the estimated fair value of each reporting unit and compares it to the carrying value of the reporting unit, including goodwill. If the carrying amount of a reporting unit is higher than its estimated fair value, an indication of impairment exists and the second step must be performed in order to determine the amount of the impairment. In the second step, ATK must determine the implied fair value of the reporting unit's goodwill which is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The implied fair value is compared to the carrying amount and if the carrying amount of the reporting unit's goodwill exceeds the implied fair value of its goodwill, an impairment loss must be recognized for the excess.

The fair value of each reporting unit is determined using both an income and market approach. The value estimated using a discounted cash flow model is weighted against the estimated value derived from two separate market approaches: the guideline company and transaction methods. These market approach methods estimate the price reasonably expected to be realized from the sale of the company based on comparable companies and recent transactional data.

In developing its discounted cash flow analysis, ATK's assumptions about future revenues and expenses, capital expenditures, and changes in working capital are based on its three-year plan, as approved by the Board of Directors, and assumes a terminal growth rate thereafter. A separate discount rate is determined for each reporting unit and these cash flows are then discounted to determine the fair value of the reporting unit.

Projecting discounted future cash flows requires ATK to make significant estimates regarding future revenues and expenses, projected capital expenditures, changes in working capital, and the appropriate discount rate. The projections also take into account several factors including current and estimated economic trends and outlook, costs of raw materials, consideration of ATK's market capitalization in comparison to the estimated fair values of the Company's reporting units, and other factors which are beyond ATK's control. If the current economic conditions were to deteriorate, or if ATK were to lose a significant contract or business, causing a reduction in estimated discounted cash flows, it is possible that the estimated fair value of certain reporting units could fall below their carrying value resulting in the necessity to conduct additional goodwill impairment tests in future periods. ATK continually monitors the reporting units for impairment indicators and updates assumptions used in the most recent calculation of the estimated fair value of a reporting unit as appropriate.

38

To test the reasonableness of the valuation, ATK compares the indicated fair value of the reporting units to the estimated public market capitalization value of ATK and the appropriateness of the assumed control premium.

Results of ATK's fiscal 2014 Annual Impairment Test

For the fiscal 2014 impairment assessment performed as of December 30, 2013, ATK utilized estimated cash flows from its three-year plan and assumed a terminal growth rate thereafter ranging from 0% to 3%. The cash flows were then discounted using a separate discount rate for each reporting unit which ranged from 9.5% to 12.5%. An assumed value was also determined using multiples from recent transactions in the industry and by comparing operating results from guideline companies.

The results of ATK's fiscal 2014 annual goodwill impairment test indicated that no goodwill impairment existed, as the estimated fair value for all reporting units exceeded their carrying value by greater than 10%, which ATK deems to be a sufficient excess.

Results of Operations

The following information should be read in conjunction with ATK's consolidated financial statements. The key performance indicators that ATK's management uses in managing the business are sales, income before interest and income taxes, and cash flows.

Group total net Sales, Cost of Sales, and Income before Interest, Loss on Extinguishment of Debt, Income Taxes, and Noncontrolling Interest include intergroup sales and profit. Corporate and Eliminations includes intergroup sales and profit eliminations and corporate expenses.

Fiscal 2014

Sales

The following is a summary of each operating segment's sales:

Years Ended March 31

2014

2013

$ Change

% Change

Aerospace Group

$

1,277,452

$

1,267,719

$

9,733

0.8

%

Defense Group

1,950,784

2,109,671

(158,887

)

(7.5

)%

Sporting Group

1,862,333

1,183,256

679,077

57.4

%

Eliminations

(315,441

)

(198,501

)

(116,940

)

58.9

%

Total sales

$

4,775,128

$

4,362,145

$

412,983

9.5

%

The fluctuation in sales was driven by the program-related changes within the operating segments as described below.

Aerospace Group. The increase in sales was driven by a $17,400 increase in Aerospace Structures sales volumes due to increased production on commercial aircraft programs, partially offset by a decrease in Space Systems Operations of $5,300 due to reduced production levels across multiple programs in the current year.

Defense Group. The decrease in sales was driven by:

•

a decrease of $93,200 in Armament Systems due to lower volumes on medium-caliber ammunition programs and completion of programs,

•

a decrease of $51,800 in Small-Caliber Systems due to reduced volume as programs neared completion and impacts from federal budget reductions, and

•

a decrease of $34,900 in Defense Electronic Systems due to startup and completions on multiple contracts.

These decreases were partially offset by a $20,600 increase within Missile Products due to production across multiple programs and pension segment closeout, offset by loss of the Radford facility management contract.

Sporting Group. The increase in sales was driven by:

•

an increase of $395,800 due to the acquisition of Bushnell and Savage and

39

•

anincrease of $283,300 in ammunition and accessories products driven by increased volume, and previously announced price increases for ammunition, partially offset by a reduction in military accessories due to completion of programs.

Cost of Sales

The following is a summary of each operating segment's cost of sales:

Years Ended March 31

2014

2013

$ Change

% Change

Aerospace Group

$

1,006,296

$

995,415

$

10,881

1.1

%

Defense Group

1,563,816

1,641,998

(78,182

)

(4.8

)%

Sporting Group

1,370,166

924,525

445,641

48.2

%

Corporate

(304,792

)

(140,662

)

(164,130

)

116.7

%

Total cost of sales

$

3,635,486

$

3,421,276

$

214,210

6.3

%

The fluctuation in cost of sales was driven by the program-related changes within the operating segments as described below.

Aerospace Group. The increase in cost of sales was driven by a $8,500 increase in Aerospace Structures sales volumes due to increased production on commercial aircraft programs, partially offset by a decrease in Space Systems Operations of $2,600 due to reduced production levels across multiple programs in the current year.

Defense Group. The decrease in cost of sales was driven by:

•

a decrease of $72,600 in Armament Systems due to lower volumes on medium-caliber ammunition programs and completion of programs,

•

a decrease of $32,600 in Small-Caliber Systems due to reduced volume as programs neared completion and impacts from federal budget reductions, and

•

a decrease of $13,100 in Defense Electronic Systems due to startup and completions on multiple contracts.

These decreases were partially offset by a $45,000 increase within Missile Products due to production across multiple programs and pension segment closeout, offset by loss of the Radford facility management contract.

Sporting Group. The increase in cost of sales was driven by:

•

an increase of $290,500 due to the acquisition of Bushnell and Savage and

•

anincrease of $167,600 in ammunition and accessories products driven by increased volume, partially offset by a reduction in military accessories due to completion of programs, and product mix.

Corporate. The change in cost of sales was driven by increased intercompany profit eliminations partially offset by the reduction in pension expense including the effect of the Radford pension segment closeout.

Operating Expenses

Years Ended March 31

2014

As a %of Sales

2013

As a %of Sales

Change

Research and development

$

62,520

1.3

%

$

64,678

1.5

%

$

(2,158

)

Selling

203,976

4.3

%

162,359

3.7

%

41,617

General and administrative

282,840

5.9

%

244,189

5.6

%

38,651

Total

$

549,336

11.5

%

$

471,226

10.8

%

$

78,110

Operating expenses increased by $78,110 year-over-year. Research and development costs decreased year-over-year in the Defense Group due to timing of expenditures. Selling expenses increased primarily due to increased commissions and other selling costs within the Bushnell and Savage businesses. General and administrative costs increased due to transaction costs related to acquisitions and the addition of costs associated with the Bushnell and Savage businesses.

40

Income before Interest, Loss on Extinguishment of Debt, Income Taxes, and Noncontrolling Interest

Years Ended March 31

2014

2013

Change

Aerospace Group

$

141,692

$

144,392

$

(2,700

)

Defense Group

210,669

270,498

(59,829

)

Sporting Group

270,523

118,325

152,198

Corporate

(32,578

)

(63,572

)

30,994

Total

$

590,306

$

469,643

$

120,663

The increase in income before interest, loss on extinguishment of debt,income taxes, and noncontrolling interest was due to increased sales and the Radford segment closeout. Significant changes within the operating segments are also described below.

Aerospace Group. Results were down slightly due to program mix across the Group.

Defense Group. The decrease is the result of lower sales within the Group and the absence of the results from the Radford facility management contract, partially offset by profit expectation improvements in Small Caliber Systems.

Sporting Group. The increase primarily reflects higher sales volumes and prices, Bushnell and Savage results, as well as product mix. The increase is partially offset by lower military accessories sales, facility rationalization costs, and inventory step-up and transition costs associated with the Savage and Bushnell acquisitions.

Corporate. The income before interest, loss on extinguishment of debt, income taxes, and noncontrolling interest primarily reflects expenses incurred for administrative functions that are performed centrally at the corporate headquarters, the difference between pension and postretirement benefit expense calculated under Financial Accounting Standards (FAS) and the expense calculated under U.S. Cost Accounting Standards (CAS), and the elimination of intercompany profits. The change from the prior year is driven by lower pension expense including the Radford segment close-out, partially offset by an increase in intercompany profit eliminations, transaction costs associated with the Savage and Bushnell acquisitions, and an environmental settlement.

Net Interest Expense

Net interest expense for fiscal 2014 was $79,792, an increase of $14,406 compared to $65,386 in fiscal 2013. The increase was primarily due to the increase in the average amount of debt outstanding, partially offset by a lower weighted average interest rate.

Income Tax Provision

Years Ended March 31

2014

EffectiveRate

2013

EffectiveRate

Change

Income tax provision

$

169,428

33.2

%

$

120,243

30.6

%

$

49,185

The increase in the current period tax rate is primarily due to the absence of the settlement of the examination of the fiscal 2009 and 2010 tax returns, partially offset by the revaluation of unrecognized tax benefits due to proposed Internal Revenue Service (IRS) regulations.

ATK's provision for income taxes includes both federal and state income taxes. The effective tax rate for fiscal 2014 of 33.2% differs from the federal statutory rate of 35.0% due to the domestic manufacturing deduction (DMD) and the revaluation of unrecognized tax benefits due to proposed IRS regulations, offset by state income taxes which increased the rate.

The effective tax rate for fiscal 2013 of 30.6% differs from the federal statutory rate of 35.0% due to the settlement of the examination of the fiscal 2009 and 2010 tax returns, DMD, and the full-year federal research and development (R&D) credit, offset by state income taxes which increased the rate.

ATK or one of its subsidiaries files income tax returns in the U.S. federal, various U.S. state, and foreign jurisdictions. With few exceptions and recent acquisitions, ATK is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2007. The IRS has completed the audits of ATK through fiscal 2010 and is

41

currently auditing ATK's tax returns for fiscal years 2011 and 2012. We believe appropriate provisions for all outstanding issues have been made for all remaining open years in all jurisdictions.

As of March 31, 2014 and 2013, the total amount of unrecognized tax benefits was $35,138 and $27,760, respectively, of which $29,046 and $21,150, respectively, would affect the effective tax rate, if recognized. The remaining balance is related to deferred tax items which only impact the timing of tax payments. Although the timing and outcome of audit settlements are uncertain, it is reasonably possible that a $4,799 reduction of the uncertain tax benefits will occur in the next 12 months. The settlement of these unrecognized tax benefits could result in earnings from $0 to $4,367. See Note 11 to the consolidated financial statements for further details.

ATK believes it is more likely than not that the recorded deferred benefits will be realized through the reduction of future taxable income. ATK's recorded valuation allowance of $13,589 at March 31, 2014 relates to certain capital loss, tax credits and net operating losses that are not expected to be realized before their expiration. The valuation allowance increased during fiscal 2014 due to the acquisitions that occurred in fiscal 2014, generation of certain net operating losses and capital losses partially offset by carryover expirations.

The IRS released final regulations relating to the capitalization of tangible personal property on September 13, 2013. ATK is currently analyzing the impact of these new regulations. We do not believe they will have a material impact on our financial statements.

Net Income Before Noncontrolling Interest

Net income before noncontrolling interest for fiscal 2014 was $341,086, an increase of $68,845 compared to $272,241 in fiscal 2013. This increase was driven by a $198,773increase in gross profit, partially offset by a $78,110increase in operating expenses, a $49,185increase in income tax expense, and an increase of $14,406 in net interest expense over the prior year.

Noncontrolling Interest

The noncontrolling interest represents the noncontrolling owner's portion of the income of a joint venture in which ATK is the primary owner. This joint venture was acquired with Composite Optics, Inc. ("COI") and is consolidated into ATK's financial statements.

Fiscal 2013

Sales

The following is a summary of each operating segment's sales:

Years Ended March 31

2013

2012

$ Change

% Change

Aerospace Group

$

1,267,719

$

1,347,802

$

(96,515

)

(7.1

)%

Defense Group

2,109,671

2,262,777

(284,560

)

(11.9

)%

Sporting Group

1,183,256

1,002,820

159,407

15.6

%

Eliminations

(198,501

)

(168,915

)

(29,586

)

17.5

%

Total sales

$

4,362,145

$

4,613,399

$

(251,254

)

(5.4

)%

The fluctuation in sales was driven by the program-related changes within the operating segments as described below.

Aerospace Group. The decrease in sales was driven by:

•

a decrease of $76,100 in Space Systems Operations sales volumes due to the completion of the Space Shuttle Program and a space services contract, and reduced production levels on multiple programs partially offset by higher sales on classified programs, and

•

a decrease of $39,100 in Aerospace Structures primarily driven by completion of tool procurement/start-up activities, partially offset by higher sales on classified programs.

This decrease was partially offset by an increase in Space Components of $18,100 due to increased production across multiple programs in the current year.

Defense Group. The decrease in sales was driven by:

•

a decrease of $129,700 in Missile Products due primarily to the loss of the Radford facility management contract,

42

•

a decrease $93,100 in Small-Caliber Systems due to decreased demand for non-standard ammunition, a reduction in modernization due to the program nearing completion, and completion of other contracts,

•

a decrease of $39,100 in Armament Systems driven by completion of an international contract and lower volumes on large-caliber ammunition programs, and decreases in projectile systems, partially offset by an increase in sales on combat systems programs, and

•

a decrease of $22,200 in Defense Electronic Systems due to startup and completions on multiple contracts.

Sporting Group. The increase in sales was driven by increased demand for ammunition and a previously announced price increase in the commercial channels, and higher sales volume for accessories within the retail channels.

Cost of Sales

The following is a summary of each operating segment's cost of sales:

Years Ended March 31

2013

2012

$ Change

% Change

Aerospace Group

$

995,415

$

1,091,514

$

(96,099

)

(8.8

)%

Defense Group

1,641,998

1,841,686

(199,688

)

(10.8

)%

Sporting Group

924,525

818,250

106,275

13.0

%

Corporate

(140,662

)

(132,947

)

(7,715

)

5.8

%

Total cost of sales

$

3,421,276

$

3,618,503

$

(197,227

)

(5.5

)%

The fluctuation in cost of sales was driven by the program-related changes within the operating segments as described below.

Aerospace Group. The decrease in cost of sales was driven by:

•

a decrease of $58,600 in Space Systems Operations volumes due to the completion of the Space Shuttle Program, a space services contract and reduced production levels on multiple programs partially offset by increased classified programs, and

This decrease was partially offset by an increase in Space Components of $9,600 due to an increase in production across multiple programs in the current year.

Defense Group. The decrease in cost of sales was driven by:

•

a decrease of $95,000 in Missile Products due primarily to the loss of the Radford facility management contract,

•

a decrease of $87,800 in Small-Caliber Systems due to decreased demand for non-standard ammunition, reduced material purchases in preparation of a new contract, and a reduction in modernization due to the program nearing completion, and

•

a decrease of $12,600 in Defense Electronic Systems due to startup and completions on multiple contracts.

Sporting Group. The increase in cost of sales was driven by an increase in ammunition and accessories sales volume, and a reserve for potentially obsolete inventory balances associated with military accessories programs, partially offset by commodity price decreases.

Corporate. The increase in cost of sales was driven by higher pension expense and intercompany profit eliminations partially offset by the absence of the LUU flares litigation accrual and restructuring charges in the prior year.

43

Operating Expenses

Years Ended March 31

2013

As a %of Sales

2012

As a %of Sales

Change

Research and development

$

64,678

1.5

%

$

66,403

1.4

%

$

(1,725

)

Selling

162,359

3.7

%

169,984

3.7

%

(7,625

)

General and administrative

244,189

5.6

%

262,923

5.7

%

(18,734

)

Total

$

471,226

10.8

%

$

499,310

10.8

%

$

(28,084

)

Operating expenses decreased by $28,084 year-over-year. Research and development costs decreased slightly year-over-year. Selling expenses decreased primarily due to absence of the Lake City Army Ammunition Plant competition expenses in the prior year. General and administrative costs decreased due to the absence of the LUU flares litigation accrual, and realignment charges, partially offset by the absence of the reversal of certain long-term incentive accruals in the prior year.

Income before Interest, Loss on Extinguishment of Debt, Income Taxes, and Noncontrolling Interest

Years Ended March 31

2013

2012

Change

Aerospace Group

$

144,392

$

143,817

$

575

Defense Group

270,498

319,428

(48,930

)

Sporting Group

118,325

91,234

27,091

Corporate

(63,572

)

(58,893

)

(4,679

)

Total

$

469,643

$

495,586

$

(25,943

)

The decrease in income before interest, loss on extinguishment of debt,income taxes, and noncontrolling interest was due to decreased sales. Significant changes within the operating segments are also described below.

Defense Group. The increase is the result of lower sales within the Group, prior year completion of higher profit international contracts, and the absence of an $18,000 change in profit expectation from a favorable contract resolution on a program in the prior year. This was partially offset by a gain on the sale of residual assets in Missile Products and profit expectation improvements in Small Caliber Systems.

Sporting Group. The increase primarily reflects higher sales volumes and prices, as well as lower raw-material costs. This is partially offset by a reserve for potentially obsolete inventory balances within Eagle Industries.

Corporate. The income before interest, loss on extinguishment of debt, income taxes, and noncontrolling interest primarily reflects expenses incurred for administrative functions that are performed centrally at the corporate headquarters, the difference between pension and postretirement benefit expense calculated under Financial Accounting Standards (FAS) and the expense calculated under U.S. Cost Accounting Standards (CAS), and the elimination of intercompany profits. The change from the prior year is driven by higher pension expense and intercompany profit eliminations, partially offset by absence of the LUU flares litigation accrual, and the realignment accrual in the prior year.

Net Interest Expense

Net interest expense for fiscal 2013 was $65,386, a decrease of $23,234 compared to $88,620 in fiscal 2012. The decrease was primarily due to the decrease in the average amount of debt outstanding and lower interest rates.

Income Tax Provision

Years Ended March 31

2013

EffectiveRate

2012

EffectiveRate

Change

Income tax provision

$

120,243

30.6

%

$

143,762

35.3

%

$

(23,519

)

44

The decrease in the current period tax rate is primarily due to the settlement of the examination of the fiscal 2009 and 2010 tax returns and the absence of the nondeductible portion of the fiscal 2012 accrual related to the LUU flare litigation agreement.

ATK's provision for income taxes includes both federal and state income taxes. The effective tax rate for fiscal 2013 of 30.6% differs from the federal statutory rate of 35.0% due to the settlement of the examination of the fiscal 2009 and 2010 tax returns, domestic manufacturing deduction (DMD), and the full-year federal research and development (R&D) credit, offset by state income taxes which increased the rate.

The effective tax rate for fiscal 2012 of 35.3% differs from the federal statutory rate of 35.0% due to state income taxes and the estimated nondeductible portion of the accrual related to the LUU flare litigation which increased the rate, as well as the DMD and partial-year R&D credit which decreased the rate.

ATK or one of its subsidiaries files income tax returns in the U.S. federal, various U.S. state, and foreign jurisdictions. With few exceptions, ATK is no longer subject to U.S. federal, state and local, or foreign income tax examinations by tax authorities for years prior to 2006. The Internal Revenue Service (IRS) is currently auditing ATK's tax returns for fiscal years 2011 and 2012. We believe appropriate provisions for all outstanding issues have been made for all remaining open years in all jurisdictions.

As of March 31, 2013 and 2012, the total amount of unrecognized tax benefits was $27,760 and $37,906, respectively, of which $21,150 and $30,248, respectively, would affect the effective tax rate, if recognized. The remaining balance is related to deferred tax items which only impact the timing of tax payments. Although the timing and outcome of audit settlements are uncertain, it is reasonably possible that a $518 reduction of the uncertain tax benefits will occur in the next 12 months. The settlement of these unrecognized tax benefits could result in earnings from $0 to $344. See Note 11 to the consolidated financial statements for further details.

ATK believes it is more likely than not that the recorded deferred benefits will be realized through the reduction of future taxable income. ATK's recorded valuation allowance of $4,242 at March 31, 2013 relates to capital loss carryovers and certain state net operating loss and credit carryforwards that are not expected to be realized before their expiration. The valuation allowance decreased during fiscal 2013 due to a combination of the generation, expiration, and revaluation of certain net operating losses, capital losses, and credits.

The American Taxpayer Relief Act of 2012 was enacted on January 2, 2013. This law retroactively extended the federal R&D tax credit from January 1, 2012 through December 31, 2013. The impact of this extension was included in the tax rate for fiscal 2013.

Net Income Before Noncontrolling Interest

Net income before noncontrolling interest for fiscal 2013 was $272,241, an increase of $9,037 compared to $263,204 in fiscal 2012. This increase was driven by a $23,519 decrease in income tax expense, a $28,084 decrease in operating expenses, a $54,027 decrease in gross profit, and a decrease of $23,234 in net interest expense over the prior year.

Noncontrolling Interest

The noncontrolling interest represents the noncontrolling owner's portion of the income of a joint venture in which ATK is the primary owner. This joint venture was acquired with Composite Optics, Inc. ("COI") and is consolidated into ATK's financial statements.

45

Liquidity and Capital Resources

ATK manages its business to maximize operating cash flows as the primary source of liquidity. In addition to cash on hand and cash generated by operations, sources of liquidity include a committed credit facility, long-term borrowings, and access to the public debt and equity markets. ATK uses its cash to fund its investments in its existing core businesses and for debt repayment, cash dividends, share repurchases, and acquisition or other activities.

Cash Flow Summary

ATK's cash flows from operating, investing and financing activities, as reflected in the Consolidated Statement of Cash Flows for the years ended March 31, 2014, 2013, and 2012 are summarized as follows:

2014

2013

2012

Cash flows provided by operating activities

$

388,020

$

273,592

$

372,307

Cash flows used for investing activities

(1,441,989

)

(96,717

)

(114,957

)

Cash flows (used for) provided by financing activities

903,254

(328,399

)

(390,811

)

Net cash flows

$

(150,715

)

$

(151,524

)

$

(133,461

)

Operating Activities.

Net cash provided by operating activities increased$114,428 compared to the prior year period. This increase was driven by a $100,000 reduction in funding payment to the pension trust from $140,000 in the prior year to $40,000 during the current year, an increase in net income of $68,700, a reduction in income taxes of $75,564 in the current year, and the absence of a $25,500 payment of the LUU flare settlement in the prior year. These increases were partially offset by approximately $184,000 more cash required to fund working capital, primarily driven by the absence of a significant receivable collection in the prior year and timing of collections and payments.

Net cash provided by operating activities decreased $98,715 in fiscal 2013 compared to fiscal 2012. This decrease was driven by a $180,000 funding payment to the pension trust during the current year compared to $74,600 in the prior year, an increase of $46,645 in tax payments in the current year, a decrease in interest expense of $26,600 due to a reduction in the amount of debt outstanding, and $25,500 related to the payment of the LUU flare settlement in fiscal 2013. These decreases were partially offset by approximately $165,325 less cash required to fund working capital, primarily driven by Aerospace Structures collection of an outstanding receivable of $102,000.

Cash used for working capital is defined as net receivables plus net inventories, less accounts payables and contract advances.

Investing Activities.

Net cash used for investing activities increased$1,345,272 primarily due to the acquisition of Savage and Bushnell and an increase of cash used for capital expenditures of $46,000.

Net cash used for investing activities decreased $18,240 in fiscal 2013 compared to fiscal 2012 primarily due to a decrease of cash used for capital expenditures of $25,403. These decreases were partially offset by the absence of proceeds from the disposition of a non-essential parcel of land within Aerospace Systems during the prior year.

Financing Activities.

Net cash provided by financing activities was $903,254 in fiscal 2014 compared to a use of cash of $328,399 in fiscal 2013. This change of $1,231,653 was due to additional debt issued to finance the acquisitions of Bushnell and Savage, offset by an increase in payments to retire debt of $101,000 to $510,000 in the current year compared to $409,000 in the prior year, and an increase in debt financing costs of $20,183.

Net cash used for financing activities decreased $62,412 in fiscal 2013 as compared to fiscal 2012. This increase was due to the exercise of an option to increase the Term A Loan by $200,000 (the “Accordion”). This decrease was offset by a $109,000 increase in the amount of net cash used to retire debt ($400,000 aggregate principal amount of 6.75% Senior Subordinated Notes plus a $9,000 premium, compared to payment of $300,000 to repay the 2.75% Convertible Notes due 2011 in the prior year period), a $15,000 increase in the required payments on the Term A Loans, and an $8,380 increase in common stock repurchased.

46

Liquidity

In addition to ATK's normal operating cash requirements, the Company's principal future cash requirements will be to fund capital expenditures, debt repayments, employee benefit obligations, share repurchases, dividends, any strategic acquisitions and the announced spin-off of the Sporting Group and the merger of ATK with Orbital. ATK's short-term cash requirements for operations are expected to consist mainly of capital expenditures to maintain and expand production facilities and working capital requirements. ATK's debt service requirements over the next two years consist of principal payments due under the Senior Credit Facility, as discussed further below. ATK's other debt service requirements consist of interest expense on its debt. Additional cash will be required to redeem all of the convertible notes and 6.875% notes as required under the Transaction Agreement. We believe we have sufficient liquidity to refinance those payments net of a dividend received as a result of the spin-off of the Sporting Group.

During fiscal 2014, ATK paid quarterly dividends of $0.26 per share for the first, second, and third quarters and $0.32 per share for the fourth quarter totaling $35,134. On May 6, 2014, ATK's Board of Directors declared a quarterly cash dividend of $0.32 per share payable on June 26, 2014, to stockholders of record on June 2, 2014. The payment and amount of any future dividends are at the discretion of the Board of Directors and will be based on a number of factors, including our earnings, liquidity position, financial condition, capital requirements, credit ratings and the availability and cost of obtaining new debt. We cannot be certain that ATK will continue to declare dividends in the future and, as such, the amount and timing of any future dividends are not determinable.

During the year ended March 31, 2014, ATK refinanced the Senior Credit Facility extending the debt maturities and adding capacity under our revolving credit facility, which increased our liquidity. Based on ATK's current financial condition, management believes that ATK's cash position, combined with anticipated generation of cash flows and the availability of funding, if needed, through ATK's revolving credit facilities, access to debt and equity markets, as well as potential future sources of funding including additional bank financing and debt markets, will be adequate to fund future growth as well as to service ATK's currently anticipated long-term debt and pension obligations, make capital expenditures, and payment of dividends over the next 12 months. Capital expenditures for fiscal 2015 are expected to be approximately $135,000.

ATK does not expect that its access to liquidity sources will be materially impacted in the near future. There can be no assurance, however, that the cost or availability of future borrowings, if any, will not be materially impacted by capital market conditions.

Long-Term Debt and Credit Facilities

On November 1, 2013, ATK refinanced its existing credit facility and entered into $300,000 in Senior Notes. As part of the refinancing, ATK increased its Revolving Credit Facility by $100,000 from $600,000 to $700,000. As of March 31, 2014, ATK had actual total indebtedness of $2,096,190, and the $700,000 Revolving Credit Facility provided for the potential of additional borrowings up to $558,242 (reduced by outstanding letters of credit of $141,758). There were no outstanding borrowings under the Revolving Credit Facility as of March 31, 2014.

47

ATK's indebtedness consisted of the following:

March 31, 2014

March 31, 2013

Senior Credit Facility dated November 1, 2013:

Term A Loan due 2018

$

997,375

$

—

Term B Loan due 2020

249,375

—

Revolving Credit Facility due 2018

—

—

Senior Credit Facility dated October 7, 2010:

Term A Loan due 2015

—

340,000

Term A Loan due 2017

—

195,000

Revolving Credit Facility due 2015

—

—

5.25% Senior Notes due 2021

300,000

—

6.75% Senior Subordinated Notes due 2016

—

—

6.875% Senior Subordinated Notes due 2020

350,000

350,000

3.00% Convertible Senior Subordinated Notes due 2024

199,440

199,453

Principal amount of long-term debt

2,096,190

1,084,453

Less: Unamortized discounts

3,212

10,576

Carrying amount of long-term debt

2,092,978

1,073,877

Less: current portion

249,228

50,000

Carrying amount of long-term debt, excluding current portion

$

1,843,750

$

1,023,877

See Note 9 "Long-Term Debt" to the consolidated financial statements in Part II, Item 8 for a detailed discussion of these borrowings.

Senior Credit Facility

On November 1, 2013, ATK entered into a Third Amended and Restated Credit Agreement (the "2013 Senior Credit Facility"), which replaced its 2010 Senior Credit Facility. The 2013 Senior Credit Facility is comprised of a Term A Loan of $1,010,000 and a $700,000 Revolving Credit Facility, both of which mature in 2018, and a Term Loan B of $250,000, which matures in 2020. The Term A Loan is subject to quarterly principal payments of $12,625 beginning on March 31, 2014, with the remaining balance due on November 1, 2018. The Term B Loan is subject to quarterly principal payments of $625 beginning on March 31, 2014, with the remaining balance due on November 1, 2020. As of March 31, 2014, ATK had no outstanding borrowings under the Revolving Credit Facility.

Substantially all domestic, tangible and intangible assets of ATK and its subsidiaries are pledged as collateral under the Senior Credit Facility. Borrowings under the Senior Credit Facility bear interest at a rate equal to either the sum of a base rate plus a margin or the sum of a Eurodollar rate plus a margin. Each margin is based on ATK's senior secured credit ratings. Based on ATK's current credit rating, the current base rate margin is 1.00% and the current Eurodollar margin is 2.00%. ATK must also pay an annual commitment fee on the unused portion of the Revolving Credit Facility.

5.25% Notes

On November 1, 2013, ATK issued $300,000 aggregate principal amount of 5.25% Senior Notes (the "5.25% Notes") that mature on October 1, 2021. These notes are general unsecured obligations. Interest on these notes is payable on April 1 and October 1 of each year. ATK has the right to redeem some or all of these notes from time to time on or after October 1, 2016, at specified redemption prices. Prior to October 1, 2016, ATK may redeem some or all of these notes at a price equal to 100% of their principal amount plus accrued and unpaid interest to the date of redemption and a specified make-whole premium. In addition, prior to October 1, 2016, ATK may redeem up to 35% of the aggregate principal amount of these notes with the net cash proceeds of certain equity offerings, at a price equal to 105.25% of their principal amount plus accrued and unpaid interest to the date of redemption.

6.875% Notes due 2020

ATK's 6.875% Notes mature on September 15, 2020. These notes are general unsecured obligations. Interest on these notes accrues at a rate of 6.875% per annum and is payable semi-annually on September 15 and March 15 of each year. ATK has the right to redeem some or all of these notes on or after September 15, 2015, at specified redemption prices. Prior to

48

September 15, 2015, ATK may redeem some or all of these notes at a price equal to 100% of their principal amount plus accrued and unpaid interest to the date of redemption and a specified make-whole premium. In accordance with the Transaction Agreement entered into on April 28, 2014, ATK is required on or prior to the Closing to issue a notice of redemption of all of the outstanding 6.875% Notes.

3.00% Convertible Notes due 2024

ATK's 3.00% Convertible Notes mature on August 15, 2024. Interest on these notes is payable on February 15 and August 15 of each year. Beginning August 20, 2014, ATK will be required to pay contingent interest of 0.30% of the average trading price of these notes if the average trading price of the notes is 120% or more of the principal amount during the measurement period.

ATK may redeem all of these notes in cash at any time on or after August 20, 2014. Holders of these notes may require ATK to repurchase in cash some or all of the notes on August 15, 2014 and August 15, 2019. Upon such note redemption or repurchase, ATK will also be required to satisfy certain deferred tax liabilities related to the notes. Based on the stock price as of the end of fiscal 2014, ATK does not expect there to be a tax liability if the redemption occurs on August 15, 2014. Holders may also convert their notes at a conversion rate of 13.1023 shares of ATK's common stock per $1 principal amount of these notes (a conversion price of $76.32 per share) in the event that the ATK stock price exceeds certain levels, if ATK were to call these notes for redemption, or upon the occurrence of certain corporate transactions. As of March 31, 2014, the conditions necessary for the holders to request their notes be converted has been met and holders will be allowed to convert at any time during ATK's fiscal 2015 first quarter. In accordance with the Transaction Agreement entered into on April 28, 2014, ATK is required to satisfy 100% of the principal and any amounts above the principal solely in cash. Previously, any amounts above the principal amount could be settled in cash, common stock, or a combination of cash and common stock, at the sole election of ATK. In addition, under the terms of the Transaction Agreement, ATK is required on or prior to the Closing to issue a notice of redemption of all of the outstanding 3.00% Convertible Notes entirely in cash.

Rank and Guarantees

The 5.25% Notes rank senior in right of payment to the 3.00% Convertible Notes and the 6.875% Notes (the latter two of which rank equal with each other), all of which are subordinated in right of payment to all existing and future senior secured indebtedness, including the Senior Credit Facility. The outstanding notes are guaranteed on an unsecured basis, jointly and severally and fully and unconditionally, by substantially all of ATK's domestic subsidiaries. The parent company has no independent assets or operations. See Note 16 for consolidating financial information of the guarantor and non-guarantor subsidiaries, as subsidiaries of ATK other than the subsidiary guarantors are more than minor. All of these guarantor subsidiaries are 100% owned by ATK. These guarantees are senior subordinated obligations of the applicable subsidiary guarantors.

Covenants

ATK's Senior Credit Facility imposes restrictions on ATK, including limitations on its ability to incur additional debt, enter into capital leases, grant liens, pay dividends and make certain other payments, sell assets, or merge or consolidate with or into another entity. In addition, the Senior Credit Facility limits ATK's ability to enter into sale-and-leaseback transactions. The Senior Credit Facility also requires that ATK meet and maintain the following financial ratios:

Senior

Leverage

Ratio*

Leverage

Ratio*

Interest

Coverage

Ratio†

Requirement

3.00

4.00

3.00

Actual at March 31, 2014

1.52

2.60

8.95

* Not to exceed the required financial ratio

† Not to be below the required financial ratio

The Leverage Ratio is the sum of ATK's total debt plus financial letters of credit and surety bonds, net of up to $100,000 of cash, divided by Covenant EBITDA (which includes adjustments for items such as non-recurring or extraordinary non-cash items, non-cash charges related to stock-based compensation, and intangible asset impairment charges, as well as inclusion of EBITDA of acquired companies on a pro forma basis) for the past four fiscal quarters. The Senior Leverage Ratio is the sum of ATK's senior debt plus financial letters of credit and surety bonds, net of up to $100,000 of cash, divided by Covenant EBITDA. The Interest Coverage Ratio is Covenant EBITDA divided by interest expense (excluding non-cash charges).

Many of ATK's debt agreements contain cross-default provisions so that non-compliance with the covenants within one debt agreement could cause a default under other debt agreements as well. ATK's ability to comply with these covenants and to

49

meet and maintain the financial ratios may be affected by events beyond its control. Borrowings under the Senior Credit Facility are subject to compliance with these covenants. The indentures governing the 5.25% Senior Notes, the 6.875% Notes, and the 3.00% Convertible Notes also impose restrictions on ATK, including limitations on its ability to incur additional debt, enter into capital leases, grant liens, pay dividends and make certain other payments, sell assets, or merge or consolidate with or into another entity. As of March 31, 2014, ATK was in compliance with the covenants in all of its debt agreements and expects to be in compliance for the foreseeable future.

On January 29, 2014, ATK's Board of Directors extended the $200,000 share repurchase program through March 31, 2015. The shares may be purchased in open market, block purchase, or negotiated transactions, subject to compliance with applicable laws and regulations. The new repurchase authorization also allows the Company to make repurchases under Rule 10b5-1 of the Securities Exchange Act of 1934. This share repurchase program replaces the prior program. In accordance with the Transaction Agreement entered into on April 28, 2014, ATK will not repurchase any outstanding shares prior to the closing of the transaction.

Any additional authorized repurchases would be subject to market conditions and ATK's compliance with its debt covenants. ATK's 5.25% Notes and 6.875% Senior Subordinated Notes limit the aggregate sum of dividends, share repurchases, and other designated restricted payments to an amount based on ATK's net income, stock issuance proceeds, and certain other items, less restricted payments made, since April 1, 2001. As of March 31, 2014, this limit was approximately $879,033. As of March 31, 2014, the Senior Credit Facility allows ATK to make unlimited "restricted payments" (as defined in the Senior Credit Facility agreement), which, among other items, would allow payments for future share repurchases, as long as ATK maintains a certain amount of liquidity and maintains certain senior debt limits. When those requirements are not met, the limit is equal to $250,000 plus proceeds of any equity issuances plus 50% of net income since October 7, 2010. The Senior Credit Facility also prohibits dividend payments if loan defaults exist or the financial covenants contained in the Facility are not met.

Contractual Obligations and Commercial Commitments

The following table summarizes ATK's contractual obligations and commercial commitments as of March 31, 2014:

Payments due by period

Total

Less than

1 year

1 - 3 years

3 - 5 years

More than

5 years

Contractual obligations:

Long-term debt

$

2,096,190

$

252,440

$

106,000

$

850,875

$

886,875

Interest on debt(1)

477,035

77,734

151,544

136,534

111,223

Operating leases

657,995

81,437

129,683

91,985

354,890

Environmental remediation costs, net

29,654

4,290

3,684

4,290

17,390

Pension and other PRB plan contributions

562,671

97,432

270,154

123,373

71,712

Total contractual obligations

$

3,823,545

$

513,333

$

661,065

$

1,207,057

$

1,442,090

NOTE: The Contractual obligations above do not reflect any changes due to the Transaction Agreement entered into on April 28, 2014.

Commitment Expiration by period

Total

Within 1 year

1 - 3 years

3 - 5 years

Other commercial commitments:

Letters of credit

$

141,758

$

125,644

$

16,114

$

—

________________________________

(1)

Includes interest on variable rate debt calculated based on interest rates at March 31, 2014. Variable rate debt was approximately 59% of ATK's total debt at March 31, 2014.

The total liability for uncertain tax positions at March 31, 2014 was approximately $35,138 (see Note 11), $4,014 of which could be paid within 12 months and is therefore classified within current taxes payable. ATK is not able to provide a reasonably reliable estimate of the timing of future payments relating to the non-current uncertain tax position obligations.

50

Pension plan contributions are an estimate of ATK's minimum funding requirements through fiscal 2024 to provide pension benefits for employees based on expected actuarial estimated service accruals through fiscal 2024 pursuant to the Employee Retirement Income Security Act, although ATK may make additional discretionary contributions. These estimates may change significantly depending on the actual rate of return on plan assets, discount rates, discretionary pension contributions, and regulations. A substantial portion of ATK's Plan contributions are recoverable from the U.S. Government as allowable indirect contract costs at amounts generally equal to the pension plan contributions, although not necessarily in the same year the contribution is made.

Contingencies

Litigation. From time to time, ATK is subject to various legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of ATK's business. ATK does not consider any of such proceedings that are currently pending, individually or in the aggregate, notwithstanding that the unfavorable resolution of any matter may have a material effect on our net earnings in any particular quarter, to be material to its business or likely to result in a material adverse effect on its future operating results, financial condition, or cash flows.

On or about April 10, 2006, a former ATK employee filed a qui tam complaint in federal court in Utah alleging that ATK knowingly submitted claims for payment to the U.S. Government for defective LUU series illuminating flares that failed to conform to certain safety specifications and falsely certified compliance with those specifications. On January 23, 2012, the parties met in a mediation session that resulted in an agreement to settle the lawsuit. As a result of the settlement agreement, ATK established a litigation accrual of $25,500 during fiscal 2012. This payment was made in April 2012. An additional warranty accrual of approximately $10,700 was recorded during fiscal 2012 as the Company agreed to retrofit up to 76,000 flares as part of the settlement.

On July 30, 2013, Raytheon Company filed a lawsuit against ATK in the Superior Court of the State of Arizona. The suit involves ATK's longstanding production of rocket motors used in Raytheon's Advanced Medium-Range Air-to-Air Missiles (AMRAAM). In the filing, Raytheon's primary allegation is that ATK breached certain of the production contracts by not delivering rocket motors. Raytheon is claiming damages exceeding $100,000. ATK disputes the allegations of Raytheon's complaint. Although it is not possible at this time to predict the outcome of the litigation, ATK believes, based on all currently available information, that the outcome will not have a material adverse effect on its operating results, financial condition or cash flows. As a result of the uncertainty regarding the outcome of this matter, no provision has been made in the financial statements with respect to this contingent liability.

On May 5, 2014, a purported stockholder class action and derivative complaint was filed in the Circuit Court of Arlington County, Virginia by Michael Blank, who claims to be a stockholder of Orbital, alleging, among other things, that the directors of Orbital breached their fiduciary duties in connection with the Transaction between Orbital and ATK, as described above, and alleging that ATK aided and abetted such breaches of fiduciary duty. A similar purported class action was filed on May 9, 2014, by Gregory Ericksen in the Court of Chancery of the State of Delaware. Plaintiffs in Virginia and Delaware seek, among other relief, to enjoin the Transaction (or, in the Delaware action, to rescind it in the event it is consummated). ATK believes the allegations and claims asserted in the complaints in the Virginia and Delaware actions to be without merit and intends to defend those actions vigorously.

Environmental Liabilities. ATK's operations and ownership or use of real property are subject to a number of federal, state, and local environmental laws and regulations, as well as applicable foreign laws and regulations, including those for discharge of hazardous materials, remediation of contaminated sites, and restoration of damage to the environment. At certain sites that ATK owns or operates or formerly owned or operated, there is known or potential contamination that ATK is required to investigate or remediate. ATK could incur substantial costs, including remediation costs, resource restoration costs, fines, and penalties, or third party property damage or personal injury claims, as a result of liabilities associated with past practices or violations of environmental laws or non-compliance with environmental permits.

The liability for environmental remediation represents management's best estimate of the present value of the probable and reasonably estimable costs related to known remediation obligations. The receivable represents the present value of the amount that ATK expects to recover, as discussed below. Both the liability and receivable have been discounted to reflect the present value of the expected future cash flows, using a discount rate of 1.50% and 0.75% as of March 31, 2014 and 2013, respectively. ATK's discount rate is calculated using the 20-year Treasury constant maturities rate, net of an estimated inflationary factor of 1.9%, rounded to the nearest quarter percent. The following is a summary of the amounts recorded for environmental remediation: